Hi,
A pak file is a container for uasset / umap files.
The patching system which is in development is built on creating a new pak file containing just changed assets.
So I don’t think disabling Use Pak File will give much benefit.
Upgrading engine versions is tricky when using a serialization system. If core structures / classes change it can cause many differences in the cooked data and the patch will become large.
Depending on the scale, complexity, and also the target platforms, if you are looking at long term maintenance it might be best to split the game up into multiple chunks which can be patched / downloaded individually. For this you need to host your pak files on a httpchunk downloader server.
Let me know if this answers all your questions.