So the update notification will show up in the panel? (With your command in Step 5 run, of course.)
Yes.

I'm assuming then it will be minimized.
Not sure what you mean, it just shows up in the panel, in either 'indicator-applet' or 'indicator-applet-complete'. I posted a comparison of those applets here:

http://ubuntuforums.org/showpost.php...7&postcount=12

Does it flash or blink or does it show the "!" character?
No. It's just an applet that's orange for non-critical updates and red for security updates.

(I can't quite make it out in your screenshot).
Is this better:

updates.png

more_updates.png