Heavy EC2 user here. This doesn't solve your problems, if you want to do this right, setup an EC2 Auto Scaling group and build an image each time you need to change your server. That is the proven way most large deployments work, including Netflix.
Yes but most people don't have large deployments like Netflix. The main reason Neftlix and co build entire images is because if you're scaling up and down by thousands of instances then the extra time for those instances to do all the build, configuration and so on is material. So you're better to do it once and essentially CTRL+C CTRL+V.
If you're only scaling up a few instances at a time then your number one consideration is probably making life easy for yourself.
We tend to take an in-between approach, baking base AMIs as needed but configuring and installing code with Ansible at boot time. We've got scripts to cut tarballs with an Ansible playbook plus support files from any tag in our repo. Then it's just a matter of specifying the tag in user-data when starting an instance. We do that through CloudFormation.
