Is it okay to digitize/modify figures "reproduced from reference" in a thesis?
Probably, but just recall that fair use is a defense in court against being sued not a blanket permission. It's always easier to ask the publisher for permission. I don't think that tracing over a scan of the figure changes the fair use analysis at all, but you should really ask your attorney. You should always reference the source of your images whether you are tracing over it or using the scan.