I think you covered most of the ways this is done, though I didn't see mention of ST_SimplifyPreserveTopology. There's clearly no universally correct answer to

I think you covered most of the ways this is done, though I didn't see mention of ST_SimplifyPreserveTopology. There's clearly no universally correct answer to this, so I suppose it depends on your aim. If you want visually pleasing coverages, maybe look at how Mapbox Vector Tile (MVT) libraries do this. I believe they use a combination of Douglas–Peucker, area-based filtering (i.e. exclude polygons below a minimum mapping unit) and precision reduction to 4096 x 4096 within a tile. P.S. There'a typo in your Poylgon.