I misread part of your earlier post...if you try to load a save and then reset the game, it won't work. You should be able to switch discs ONLY when that message (insert disc #) is prompted on screen.
Otherwise that option will remain locked, at least in my experience.
To verify if your pkg is able to switch discs at all, you can boot disc 2 and try free ride in one of the disc 1 cities...it should ask you to insert disc 1, see if you're able to switch discs with the switch disc option then.
For your question: It might not work for you but what i do usually:
-create new EDAT for the new EBOOT (if i didn't make a new one i'd get a black screen when booting game up)
-if the PKG of the ps1 game is installed there should be a folder named after the gameID in the game folder of your ps3 (the original one, not the ones made by the file managers). In that folder there's another folder called USRDIR. Replace your old EDAT with the new one in this folder. This folder also contains another folder called CONTENT. Replace old EBOOT with your new one.
-(soft) reboot
-Start game from xmb, just the normal way.
This way you don't need to repack your pkg and go thru transfer and installation again.