You want differential signalling, whether that is direct from the encoder or a line driver close to the encoder so if you go with the AMT you will have to either build a line driver circuit or buy one.
The old encoder has index signals, that is the Z and Z- and you will be able to do index homing with it, assuming of course it is ttl output, it likely will be.
Higher counts are definitely an advantage, the encoders I have on the motors are sine/cosine encoders, what they call smart encoders, and have a standard count of 1024 lines (4096 quad), as they are sine waves they can be accurately interpolated and my drives can provide that to 256x.
I think personally I would set up with the original encoders first and see how things are, you will likely find they are at least as good if not better than now.
Hood