I didn't manage to get the file system to load as "read write" and eventually gave up on this route.
I checked out http://fokke.org/site/content/howto-create-android-updatezip-package and it seemed that an update.zip was the way to go (to patch without the OS booted).
I downloaded the "unroot" patch that I referred earlier to get some hints on the structure.
The direct link to unroot is at http://mygicasupport.com/applications/core/interface/file/attachment.php?id=3552
Below is what it does.
mount("ext4", "EMMC", "/dev/block/system", "/system");
So in theory the update this should work without any modification... and it does.
My device is now "unrooted" after running - with no other issues detected after a day or two of testing.
To restore root we would basically just reapply the latest firmware (with was already rooted).
Hopefully this helps other people struggling with the same issue.