Is it a better option to try and field an U23 team with Olympic qualification in mind.
Nah, that just makes the problem worse as you shrink the pool of available players even further, ie anyone above age 23 can't be picked.
Again you would be picking a host of players, who wouldn't come close to making a full strength U23 side in Tokyo.
NZF are targeting sending an U23 side to the Pacific Games in July. That should ensure all eligible players are available, except those in MLS/USL.