On balance I still think I would (try to) use full reverse on both engines during a rejected take-off, I'm not clever enough to start choosing options and the reject is one of the few emergency procedures that has to be carries out quickly (and accurately of course).
The 707 under discussion had a fully developed fire outside the engine by the time they came back for a landing. I would have thought most fires causing a reject would not be developed enough to fan the flames onto the airframe in the vast majority of cases?
All the airlines I've worked for commenced the engine fire on take off drill at 400'agl, seems to be the norm in the UK at least (Boeing types) so can't comment on other ideas.
I personally haven't yet seen it but I've just been discussing a video shown at fire training where an aircraft sits for an extended period with an engine burning on the ground (with the fire engines in attendance). The crew do not evacuate the a/c and I believe the fire is eventually extinguished. This video seems to polarise opinions and highlight the different approach to some emergency situations that is taken in different parts of the world.