Jim- While not as simple as upgrading through an ongoing search, especially early morning manual searches oftentimes yield some nice upgrade opportunities, even in today's climate. We recently nabbed a 2BR Lahaina villas using a studio deposit via an instant exchange (and $198 upgrade fee), and have seen several other 1BR and 2BR opportunities both in Hawaii and elsewhere, esp. if you have some travel flexibility. While my exchange into Hawaii was outside of Flexchange, the size upgrade opportunities increase dramatically the closer you get to the arrival date, so if you have the flexibility to make Flex exchanges a studio can work really well for you.
Another nice plus with the 2BR's in Maui is the ability to lock off and book consecutive weeks. Esp. coming from the East coast 2 weeks may be more enjoyable, and as you approach retirement that may become increasingly attractive. The great thing is if you do that you have the option of looking in II closer in and trying to upgrade the studio week; if something becomes available you can instantly deposit and upgrade the unit size, even as late as right before check-in. Worst case is you spend one week in the studio and one week in the 1BR for 2 beautiful weeks rather than one. Of course, utilizing the 1BR and renting the studio, as discussed above, is a viable alternative as well.
Alternately, if you prefer to save the upfront cost of a purchase and opt for a 1BR, keep in mind that you don't need to buy more points in order to have enough points for the occasional years you need more space. I appreciate your reluctance to rent on Redweek, etc., since there is always an element of insecurity there, but you can easily rent DP points from others for close to the annual MF's with minimal risk, and then make your own DP point reservations; since the reservations would be in your account, that would satisfy your aversion to renting a unit that you don't have complete control over and that isn't guaranteed. So if you're thinking of the 1BR hybrid purchase, personally I'd opt for a resale 1BR that can be purchased for far less money on the external market.
Just thought of another consideration wrt legacy week versus DP point purchases- keep in mind that week owners are at the top of the pecking order for room assignments, and that can make a big difference.
You're right in that Maui is a special place, and you can't go wrong with whatever you decide.