The OP already has ATPL theory credits.
The obvious response is that the OP had the credits but IR lapsed by more than seven years therefore no longer holds those credits unless an ATPL had been issued. If a CPL issued, in order to obtain an ATPL, the OP is required to undertake the ATPL examinations again following a period of seven years since
expiry of last IR (note that the CAA also gives a little more latitude than Part-FCL). If you obtain a Multi-Crew Type Rating, meet all the other prerequisites including 500 hours multi-pilot experience and get the ATPL issued, then the 'credits' become valid for the life of the licence. Not sure how a Flight Instructor can hold ATPL credits indefinitely though without already holding an ATPL? Can you provide a reference to this?
Don't disagree that the FAA IR path is an option in the case of an expired IR but probably not for everyone as I feel the costs you have estimated are a fair bit higher than the MEIR renewal (in fact it would be a CBIR). Do we know whether the OP had MCC credit? If so, and as mentioned, no need to do it again. If OP is looking for an airline job, ATPL credits are normally required before selection - usually states CPL/IR MCC with ATPL credit. A large EU LoCo is currently requiring:
Valid EASA Frozen Airline Transport Pilot Licence (ATPL), Valid multi-engine instrument rating, Flight crew license (theoretical ATPL with valid EASA CPL*)
[* with a MEIR and MCC constitutes the oft-referred to 'Frozen' ATPL]
Concerning the MEP, to open a Part-FCL licence, the OP will need a class or type rating and therefore I would have thought for the sake of what little is required to combine a MEIR with a MEP skill test, it would save time, effort and money in the long run. But as said earlier, if its only the IR that is required, only the IR exams are necessary.