Thank you for the details.
As you are using Auto Scaling Group, I would recommend taking a look at instance refresh feature, which pretty much automates all the mentioned manual process: https://docs.aws.amazon.com/autoscaling/ec2/userguide/asg-instance-refresh.html
For instance, set the minimum healthy percentage to 100 percent, ASG will ensure there's at least one healthy instance and gradually replace all the instances to use the new launch template. Please take a look, have an experiment in the staging environment, and see if this fits your requirement.
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