I think the idea of whether the trajectory is continuous or not is very technical, and not very conceptual. Conceptually, one can always assume a discretization that is much finer than the spatial resolution of one's measurements, and "construct" the continuous track from these low resolution readouts. It's in the same spirit as lattice simulations of quantum field theory, which cannot have true Lorentz invariance, but can be Lorentz invariant for all practical purposes, as long as the discretization is much finer than what current experiments can see. Mathematically, it does matter, and one can worry about whether the continuum limit really exists, but I would say that at the physics "conceptual" level, there is no big distinction between continuous and discrete (there are exceptions to the rule of thumb, eg. chiral interactions on a lattice, but let's worry about that elsewhere).
In the 2 methods of analysis the conceptual puzzles are different.
1) In decoherence followed by a single measurement and collapse, the puzzle is indeed why decoherence localizes objects. The general answer is that interactions are local in space, with nearby objects interacting more strongly, and distant objects interacting more weakly. This is just a fact of nature that we incorporate into our models of decoherence. Incorporating this fact leads to localization by decoherence.
2) In the case of multiple successive measurements, it's no puzzle why localization occurs, since the position measurement will collapse the wave function into something like a definite position. The puzzle is why in many cases the track is straight enough to get a pretty accurate momentum measurement, which seems to violate the restriction on simultaneous accurate measurement of position and momentum. The answer is that in many cases, the position measurement is inaccurate. An inaccurate position measurement gives a definite position readout, but it does not localize the wave function very tightly.