Managing custom alterations through theme updates

Thats probably the easiest way, if you adding them in a custom section away from everything else (at the bottom of the file or wherever you prefer). You could also add another custom php file and link to it from your functions file….but either way will work fine. For the functions file, there won’t ever be that many changes to it that would make it difficult to see what changes were made in the update. You could use a site like this – http://www.diffchecker.com/ to see the difference between old and new files.