Thanks for your detailed response. That helped a lot!
So, if at a certain point (let's say in 10 years) a new version of Electrum uses a completely different algo to generate the seed and I input my old seed, will my wallet not get compromised?
Hope Thomas can confirm this.
10 years from now, assuming you have perfect backups of your wallet file and the Electrum software you can dump bitcoin's private keys from the software itself and import them into most bitcoin wallets.
Worst case scenario, with the wallet file and the password (no software), you could get the master private key and derive the private keys with your money.
So, as long as you have at least the seed or wallet + password, you can recover forever and ever and don't need to worry about upgrading.
At worst, you won't be able to create a transaction, but you won't lose access to your funds, as long as the bitcoin network doesn't change fundamentally.