Making this possible in Magento would require you to change the database structure,for example the sku
field in the product flat table is a UNIQUE
value, but also several files for the admin and any other code that filters products on sku
.
If it's purely for a visual reason I would suggest using your first approach. It would require you to edit several template files but would definitely be of less risk to the stability of your installation.
From my experience, making these kinds of big changes to the Magento core inevitably leads to conflicts. Either in the Magento core or third party extensions.