You appear to be asking all of the correct questions. I am unable to recommend medical treatment without performing a complete history and physical examination. You accurately describe the benefits and risks of each treatment option. I suggest that you and your physician have a discussion about what is best for you. Diet is a critical treatment in addition to medication, exercise and self monitoring. It sounds like you have identified your problems so you must decide which treatment you will accept and what you are willing to do to better control your diabetes and improve your long term health.