@Freakabhi
You can consider few more points before choose one of the approach, like...
1. Number of records: approach 1 is fine for very huge records and approach 2 is ok for the less records
2. How to handle the issue if something goes wrong? : The 4th step in approach 2 deletes base table and recreate with new data. Consider you have noticed an issue with data after couple of days, how do you get deleted base_table? if you have answer then go for approach 2
3. Approach 3: You are choosing approach 1 because Hbase supports updates but hive does not support updates (I guess this is your understanding). Yes your understand was correct with old hive version. But Update is available in starting Hive 0.14
https://cwiki.apache.org/confluence/display/Hive/LanguageManual+DML#LanguageManualDML-Update