Problem is that, if insurance is included with ticket (Emirates), extending the ticket later will invalidate the insurance. Or rather, will leave you without cover for the extended portion of your trip.
If you can guarantee getting back in before your visa expires, you shouldn't need a re-entry stamp. However, if for some reason, you cannot get back before then, and depending on when your current stamp expires, it may be worth considering buying a re-entry stamp as a precaution. I had to make a similar calculation when I returned last year. Didn't work out for me though, due to the Covid entry issues.
Not true, travel insurance is for travellers, whether on holiday or not. It can last for as long as you are prepared to pay for. I use this form of insurance all the time. I stay in Thailand for 90 days but my travel insurance covers me from departure from UK until my return, certainly more than 90 days total.
I do the exact same timings. The single entry O, from the London Embassy, worked for me with 90 day stints in Thailand. I tried to be smart and get a multi O-A to save on applications but the insurance requirement will put paid to that.
With hindsight, what you say makes sense. However, when I bought my O-A, there was no mention of health insurance being required. Previously, I used a Non O which involved a separate application every time I wanted to come to Thailand for 90 days. The O-A offered a means of only applying every two years, for an unlimited number of trips, which made sense at the time. What does not make sense is buying an annual health insurance for a 90 day trip, when travel insurance provides adequate medical coverage for 90 days. What the Embassy are suggesting is a way of getting by until my O-A expires and I can then apply for a Non O again.