Are you going to use the LR32, or do you have access to a line boring machine?
The undermounts are great - I used them in my kitchen and they were easy to install.
You have some flexibility with the filler strip. Depending on how straight your walls are, you could go even smaller if you like that look.
Personally, I prefer to bring the filler flush with the face of the cabinet drawer/door. I think it looks a little more 'bespoke' that way, but it seems to take longer. I also saw something where the filler had a step down, so there was what functioned like a 1/4" reveal at the wall. That seemed like an interesting look.