Paper wallet creation, how safe is this approach?
Sounds pretty safe to me. You should always consider that any machine that is connected to the internet at any time (and some that are not) can be compromised. The questions are, are you a likely target? Do you download or browse sites with questionable items (eg are you infected by something, or COULD you be) 

Personally, i just run a VM, it's not connected to any network, i use the vmware client to reach it, i follow your steps 3 &amp; 4 (although I use chrome) and then i reset the vm to a snapshot.