That wasn’t possible before with content as that just simply added given package version (I might be wrong. I don’t remember everything and I am using localrepo for about a half year for now). Now with localrepo you can specify source repository with ease in install command (Install("pkg", {repository = "localrepo-NAME"})).
Well yes and no. You don’t want to do that manually but you should use localrepo (as that script handles index creation and simply copying to correct directory won’t create new repository index). But overall yes. Even if you were using opkg wrapper (just opkg command) to install them then it should be migrated automatically (all content fields in auto.lua are automatically migrated).
There will be a section for it in updater’s documentation before we drop it. It’s not the first obsoleted feature and won’t be last. If you run new version of updater from cli it will tell you if you are using some obsoleted syntax or option.