One of the main challenges with trees like this is getting buds where you want them. As long as there are shoots where you need branches (it’s hard to tell from the photo) it could be a fun project.
As for the digging, your ideas sound good. Start wide and deep and try to end up with a fairly small pot if possible. The main need for a larger container is if you want to let new branches run for a while to thicken up, though the main thing is keeping the tree healthy through the transition.
If winter is mild where you live, now could be a good time for the transplanting.