Huh, a lot of questions. I’ll try my best to answer them.
I am using KY 040 encoders with breakout boards, they have some resistors and that takes care of bouncing, I believe.
The code on the Arduino is just the sketch. Don’t need to flash or firmware upgrade anything.
On the Due I am using different ports and also in the code RX and TX are separated. It even runs with different sessions of the program. So far it runs smoothly. I think it does not depend how many switches and displays you have, but how much data you run across the serial simultaneously. Hence the DUE might be better equipped for that.
Please check out my link and BitsAndDroids Discord, he is very quick to help. Should you have any more questions, please ask in the other thread. I am glad to help.