Theoretically you are right, but Panorama doesn’t allow you to change the list of values independently of the data itself. I think way too much potential for a user to make a mistake and lose data if that was allowed.
Yes, that will work. Actually, I believe you could simply morph it (or use Find & Replace), then change the list of choices. You don’t have to change it to text. The Choice data type allows any value to be stored in the field, however, it is much more efficient for values that are listed. But non-listed values are allowed.