At the moment we only have C-rank chakra control, so we're wasting a lot of chakra to get it work. Get us up to B-rank control and then we'll talk.
In the meantime we can simply throw more chakra at it.
I kind of figured this'd be helping us
get to that B-rank control, but even if it doesn't we'd likely be closer. Sealcraft won't help with the control that much, at which point the Iaido option seems better than anything else because fundamentals matter and it'd bump control some.
I reiterate that we need to come clean to Sarutobi. Before prisoners can spin their tale, explaining how our existence is a blemosh that prevents a brighter future from existing. Entirely true fro their point of view too!
When complete secrecy is impossible, get in front of the disclosure and control the flow of information!
I agree we should come clean to Sarutobi at some point soon, because we have no way of knowing if this is the only other SI out there. I don't think the prisoners are a good reason to do so, however, because we want to let them be mined for information first. Let us come clean after we're genin, or when he comes to talk himself.
Hiruzen isn't going to turn on us if the prisoners talk, but I think he might if we start spouting the same crap as Orochimaru's minions after they attack (even if we frame it differently) but
before we've really proven ourselves to be
loyal. The whole attack could be an attempt to make us look better, win sympathy, so as to feed him bad intel (certainly a bunch of our canon knowledge is no good even
if that was the only other SI). Certainly doesn't help that Orochimaru has a vested interest in the only two people we interact with regularly.
Even if he doesn't think we're a plant, he might think we've been genjutsu'd or otherwise compromised, and I don't think Hisana will enjoy the process of proving that to be false very much at all. It might sink our chances to be on a team with Naruto or Sasuke, at the very least, due to the time involved in sorting out what happens. I couldn't blame him, either, because that'd sound a lot like the sort of post-traumatic breakdown that might make you reconsider having both the remaining members of a clan on the same team, especially if you want to keep the masquerade of Itachi going crazy as a secret.
The intel is only semi-verifiable at best, because of butterflies. If that's the only other SI they might still be close enough, but let's assume there's a half-dozen more. At that point, canon information is a good
baseline at best, and not to be trusted to be totally accurate. Semi-verifiable information of that sort can be acquired in a wide variety of ways that are far more likely and trustworthy than "an Outsider said so" and let's not assume that SIs are inherently more believable than the average person.
But some of that intel would be both stuff able to be found out in-person
and classified, which means that Hiruzen has to start looking for leaks. I'd rather avoid having him think that we
are a leak, or that we've used one that we refuse to name in order to get information that we absolutely cannot have, in a "sharing this is death penalty" sort of way. And given that there
are leaks, I'd rather wait until the Hokage has hunted some of them down before letting him (and anyone who listens in) know about an advantage that is now proven to be far less than perfect.
If you're going to give into paranoia, at
least follow the paranoia through. Panicking and spilling the beans is rarely the best plan. Once we're known to be loyal
ninja, talking to him will both be easier and less likely to backfire.
EDIT:
That depends on how much of their intel is verifiable. Say, for example, they know the truth about Uchiha massacre. And Naruto parentship. What next? This proves them to be extremely well informed. Then they say that Uchiha Hisana is a rogue membef their organization. And since she clearly withheld what she knew, well, she can't be an ally of the village, right?
What's the line? A secret between three people is only secure if two of them are dead? They can maybe spin tales about Hisana, but again, her confronting him isn't likely to
disprove that, and barring us sticking our foot in it the attempt would come across more as a last-ditch attempt to discredit a powerful genin candidate with intel they got in some other way.
Assuming that they got given that intel by the other SI, which isn't a guarantee. Hell, we don't even know what the other SI knew for sure, they could have followed canon up to Shippuden and then stopped and
still have taken the same actions.