Hi there. I will rely on colleagues to fully answer your question, but I wanted to clarify a couple of things:
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When you say “just like any stock BalenaOS available on the dashboard,” is it a requirement for your custom host OS image to appear as an entry in the dashboard dropdown box that lists the available OS versions to upgrade to?
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Are you using, or aware of the openBalena project? I am not clear if using openBalena would make it any easier (or harder) to achieve what you intend, but it’s certainly good to be aware of the project. I’ve found this openBalena forum thread that indicates how to perform a host OS upgrade: Roadmap for BalenaOS Updates in OpenBalena
The hostapp-update script runsbalena pull "$HOSTAPP_IMAGE"
and I reckon that if it came to it, you could update that script to pull your custom OS image from a different docker repository.