Any or all of your ideas will help, it largely depends on your climate and how long of a below freezing stretch you can expect. The drain outlet is supposed to be within some distance of the ground, 18" I believe, which is why it was configured that way. In areas subject to freezing, all piping carrying water should be run as far as practical inside the heated envelope, so the drop to within some distance of ground should have been done inside. If possible, rerouting the run inside, with only a very short run outside should solve the problem.
As BMitch suggests, routing the drain through trap would comply with plumbing codes and is the best solution.
Shortening the pipe could fix the problem entirely since the water may not have time to freeze. In frigid climates though, any water outside will freeze. The high outlet could damage you outside wall finish and be an annoyance to passers by.
Widening the pipe will require more build up before blockage, so if the freeze periods are not too long, this could work. In frigid climates, it will still block up eventually.
Insulating the pipe would probably be all that's needed, it has the same effect as shortening the pipe, without wall damage. Actively heating the pipe would certainly work, but is probably only needed in extreme cases. Heat tape that wraps around the pipe and is plugged in to an outlet, with a thermostat to turn off the current above freezing is a common hardware store item in cold climates.
You only have to worry about the attic if it gets below freezing in there. Attics, though ventilated with outside air, tend to stay a fair bit warmer than the outside. I would guess that unless you have good runs of outside temperatures consistently below 0F(-18C), you shouldn't have a freezing problem in your attic.
I'm not sure, but I suspect there is not an override. A blocked drain can cause significant problems if the furnace continues to run. By shutting off the heat, it is good incentive for the owner to solve the problem.
While you can't have it drip off the balcony, you can turn it into a fine mist and blow it off. Even a fine sprayer would work fine, but you'll need a float switch to auto-activate it, and a pump. On the plus side, this will air condition your balcony as well.
Home Depot has a bucket-top misting fan that looks like it would solve your problem. You would need to hook it up to a battery or adapter.
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Best Answer
The location you suggest is going to be the best suited. The U-bend is effectively a vapor/odor trap to prevent back-smell from getting through the tubing into your household. Any other location would require that you create a new U-bend to prevent those gases from returning via the new drain line. One could expect odors from one drain line returning via the other, but there's nothing to prevent that with the existing line running solo, so that would mean you don't have odors from the condensate. Ensure that the flexible tubing will not kink when connected to the T fitting and you're good to go.