Application of a continuous vapor barrier at the ceiling. This would be the #2 method, with plastic added, and taped as needed. You should use a minimum of 4 mil. The paper barrier is wise for the reasons stated by the company, but the paper barrier is discontinuous. In Minnesota, in residential construction, a continuous (seamless) plastic barrier is required (tape on seams). This reduces moisture entering the attic spaces and the environment for moisture problems above. It sounds like in your case you have heated air, this barrier will need to be a special fireproof type, check with the installer that recommended the kraft paper and the hvac installer. [if you are switching to a 100% metal return system like you implied, this won't be needed, unfortunately if you do x before y, it'll be required by the chronology of the work, unless the inspector approves otherwise beforehand]. The condensation problems will go away with a continuous barrier and proper venting above.
Also, make sure the hvac or insulation folks provide an attic venting calculation (formalized) for you, if this wasn't done. It has nothing to do with the heating system and would cost more, but it is important for the roof. You must vent the attic space properly in order to get the best situation for this currently imperfect system. The thermostatic vents only work properly when they have adequate intake at the bottom of the roof, or they can pull air from places it shouldn't come from (i.e. the open spaces below), and actually increase problems. If you apply a continuous barrier at the ceiling without having attic intake for these vents, you'll pull moisture through the walls of the structure, lending to moisture in the walls, another no-no. Make sure your insulation contractor has express instructions related to venting those spaces, and that they follow them, if you have a traditional roof, they mustn't blow over the vents with insulation, for example. By the way, the gable vents combined with thermostatic vents is incorrect because the gable vents are designed as exhaust vents, and you have them working as intake vents (with the thermostat vents above), those should be closed off, given proper intake venting at the bottom of the roof, or in the soffits. Think of it like opening two windows right next to each other, versus opening one window across the room, which provide a better cross wind?
Another good type of vent in certain situations is roof ridge vent. Ridge vent can be installed in existing roofs, but doesn't sound like that'll be needed with the power vents you have, and I can't really tell what type of roof you have based upon the info provided, so I can't advise well and thoroughly for your case.
The best insulation product available today, imo, is blown fiberglass. It resists settling and maintains its R rating the longest of available kinds. One problem you must address is the current batts will get pushed down some by the blown in. Therefore, you should account for that in your calculations, and you should probably consider going to R44 depending upon your area, it probably won't or at least shouldn't cost much more. Additionally, you'll want to make sure the attic space is thoroughly dry before application of additional insulation.
Based on the costs of heating spaces, at least in Minnesota, the insulation job will pay for itself long term over the life of most structures. I can't provide you with any numbers, just common sense.
You are already wise for soliciting the opinions of people not motivated for financial reasons.
I'm pretty sure the continuous barrier would be a code restriction in most locales as well, but many insulation folks might not like the job because you might have a lot of stuff in the way in an existing structure, you must mandate it.
Once you have a good plan in place, then and only then should you talk with contractors, tell them what you want, and get the bids based upon your designs, not theirs. Given they are all bidding on the same apple, then and only then will you be able to appreciate the bids, and their willingness to comply with your needs. Too many contractors bid a job to get the job, not to do the job correctly. Unfortunately, you don't get good comparisons, and will never really know which contractor you like the best.