Thanks very much for this posting this workflow!
Regarding the setting of extensions.zotfile.pdfExtraction.formatAnnotationHighlight, I wonder if it is possible to add a fixed ID/identifier to each highlight. Then, it’ll be easier to do block reference.
Although obsidian will automatically generate a block ID for us, this ID is changed after each extraction from zotfile/mdnotes. And then all links pointing to our highlights will fail.