1. Yes, extension is very well possible. The train reaches MUV on Tu, th, Fr and leaves MUV on M,W,Sa. So it idles for about 25 hours at MUV. Extension ALY is very well possible. In fact even till CNB it will go with no problem though that will destroy the purpose of the train.
2. No, the proposal is not worthwhile because 12538 will have to leave ALY at odd hours, say 4:45 in morning.