Hello Suhas,
Since OS visualise each record as an object
The is not the case especially when using non persistent objects.
This is where the real power of Transaction services come in. It gives us the granularity to have a single transaction object which may have 1000 Db updates or 100 Objects with 10 DB updates or 1000 Objects with 1000 DB updates.
We could do the same using classical approaches too, but the ease and flexibility of the transaction service is always a highlight.
However with persistent objects, I guess you have no choices left. 
. You are spot on that persistent objects and Mass processing never go hand in hand. Infact, I once used them as an experiment in a certain enhancement and regretted using them. This was in Mass conversion of Planned orders 
.
But , As you might already know, a persistent obejct is never stored in the DB, it is made persistent by the ABAP persistence service. The DB has it as a data record only and a mass migration by using SQL commands would not harm the persistent representation of the object.
I have used Persistent objects and the persistence service to a large extent and I really enjoy working with them, especially handling data changes and Object states.
As always, happy to recieve your inputs.
Thanks,
Venkat.