Streaming updates are supposed to make for a seamless easy update experience for the user... Update uses little data and images are created on the fly from active partition blocks + any updated block data from delta OTA, and all while user still has access to phone... Reboots should also be very quick it all went well, and if not phone simply boots again to original slot...#1 is what I would love to have also, but have been unable to find any information anywhere how to do this. If one could download the OTA and have the standard "Update is available" process allow you to specify the downloaded OTA image, then the process @pndwal referred to at https://github.com/topjohnwu/Magisk/blob/master/docs/ota.md#devices-with-ab-partitions would allow the OTA update be applied with stock images restored, then use Magisk "install to inactive partition" be used *before* rebooting. In fact, my Moto Z3 is running PixelExperience ROM and I get streaming OTA updates on that phone, and follow @pndwal's referenced process without a hitch, each month.
I can't suss out why Google insists on "streaming" OTA updates, and forbid local OTA updates. I suspect the reasoning is based somewhat on they don't want to encourage rooting. Which I suppose is not unreasonable from their view, but if someone has a rooted phone/unlocked bootloader they have already voided their warranty, so IMHO it should be left to the owner of the phone to make these decisions.
There are various uses for full OTA images but these are really outside the purpose of the A/B seamless update engines purpose... PW