Hi,
Yes in order to update the software you load it onto a USB stick and then plug that into the device. I don't know if you would really need to update it any time soon though, as long as AA/Carplay works I would leave it.
Yes using wired or wireless without any issues. The only slight gripe would be that if one person has Android and the other has an iPhone, the HU has a preference to connect to Android instead of Carplay (say the other phone is in the house, for example). So you need to then disconnect the Android device and force it to connect to the Apple device. If away from home or the other phone is not nearby, then no issue.
I suspect that might be the case with any wireless AA/Carplay unit, it's why I prefer wired. If it's just you driving, then you won't have this issue.
I would not try and cut out a slot for the passenger airbag status, there's no way you'd do a neat enough job on the plastic. Best bet is leave it behind the radio, maybe try and pull it out to the left side so you can take a glance at it every now and then by removing the glovebox - the gap from the glovebox allows you to see behind the radio to a certain degree.
Alternatively, plug in a code reader into the OBD port to check for any fault codes, say once a month if you really wanted to.