As Beigg said, DTE will update the drop to 200A for free once you have made the panel, meter and service feeder upgrades. They will not do it until they see an approved permit.
Best way to go is to replace the panel with a SquareD QO 200A main 40/40 panel, upgrade the meter and service feed, pull the permit and get it approved. It's < than full day job w/ 2 guys. Once the permit is approved, DTE can upgrade you for free, and you can call your insurance company for a discount. Beware of NEC code requirements/upgrades, and tying the new service feed into Edison hot (up on the roof/weather head) is not for a novice. You might also want to consider installing a whole house surge suppressor while you're replacing the panel.
For the generator feed, the best way is to install a manual transfer switch next to your main panel. Then a generator plug (240V 50A) is installed on the exterior of the house, fed into that TX switch. When power goes out, you simply flip the switch on the transfer switch and it'll feed your house from the generator feed vs DTE.
An alternative to the transfer switch, if your panel supports it, is an interlock kit. You still need the generator plug, the home run to the panel, etc. I prefer the TX switch approach, but this is cheaper and functional/legal.