Thanks for the detailed reply.
I have an android device, Oneplus One, which is rooted by me but have latest google security patches.
I have PIN code access to the phone and PIN code access to Mycelium.
The seed is backed up on text document which is zipped with a password on cloud storage service and printed on a piece of paper as well.
No problem.
Now for the issue. You said you have the seed in a text document which was zipped. This means the seed was actually 'online' at some point. So, for the security concerned people, they would say (me included) that your machine 'could' have been compromised already. You get the point.
Good point
So... should I create a new wallet and back up the seed on a piece of paper?
Still, a person would require my pin code to do transactions, isn't it?