Thank you for your responses.
1/ We have game in 1080p that when played on 4K monitor becomes kind of blurry. However, with activated pixel effect it looks... well, good? Yeah, its kind of oversharpen and definitely not to everybody taste hence why we would like it to be an option for player to decide.
Pity it cannot be turned into option, but I'll probably manage to get it work via "replace game" and "export scenes separately". I hope.
2/ Both upscaling methods produce blurred image in 4K. It's not by any means terrible, but weird - 4K is 1080p times four, one pixel becomes 4, image should be crystal clear and sharp. I was hoping that removing in-game magnification filters will will help achieve that.
3/ I'll give it a try anyway, thanks for pointing me in the right direction.