Doing some further research on the topic it seems I have answered my own question, at the time of writing I wasn't aware but the technique described with the multi-sig seems to be named 'CoinJoin' (https://en.bitcoin.it/wiki/CoinJoin).

Does anyone have experience with this? how do people group up? are there pre-made groups available that one can just hop into? and are dedicated clients needed (I assume so as normal wallets don't seem to support multi-sig, or at least not from the UI point of view)