This seems to be the day for discussing update methods ;-)
1. security accounts need to be re-created
I wouldn't do this. I'd open a current copy of the file in filemaker and save a copy with the clone option. I'd then work with this copy of the DB to update it. That way I have all the current accounts and passwords in the copy I am updating.
For more on other issues involved in updates, see this thread and the one it links to: Setting Up A Development Copy
Unfortunately I can not do that as there are 3 clients and each has their own user accounts, so unless I copy all 3 files and do the work on all 3 which would be very time consuming this doesnt work in my scenario.