In response to your questions and using the same notation my answers are as follows;
1) Your mans the mechanic, Iam not and have not seen the car but when mine went I needed new bearing shells.I got away with out replacing the turbo.
2) Conversion from a chain driven unit to a gear driven unit is EXPENSIVE and cannot be done for the price of the parts you are quoting period! The cost of the parts from Audi is circa £1000-1400 from my own recollections going back to late 2011.Please note what I am saying , parts for a full chain to gear conversion using approved Audi parts.
3) My own BLB chain driven unit failed at 68k and after the repair which cost me circa £2000 including a new water pump and timing belt kit at Audi Teesside ( this was with 50% off labour and 20% off the parts) my car is (in the engine department) fine after nearly 90k.That said I have recently replaced the turbo at a further £850 and the EGR valve for £250.........geeeeeeeeeeeeeeeee
4) My opinion is get shot if you can afford to ( then again can you afford to keep it ............)
5) No idea.
Good luck with the car and with whatever you decide.