As @aurdipas states, the form version requirement is on Central's part.
I've been involved in projects like this that have in the low 10s of thousands of updates. The form version screen in the Central frontend gets slow because there's no paging there but everything else works. Depending on the size of your entity lists it can take up a lot of storage. You can elect to remove some stale form attachments though that has to be done directly from the database and is risky.
One thing I see missing in your script is a condition to only update if there are entities to update. This could be as simple as pulling submissions since the last update and exiting if there are no new ones to process. Since you likely won't have folks in the field every minute of every day this would greatly reduce the number of new versions made.
This is currently your best bet. We are working on automating this kind of workflow as described in Entity-based data collection.