The smart thing would be to decouple the control of capacitor voltages rather trying to switch only 1 capacitor at a time. For example, consider a 5-level FC multilevel converter, there may be multiple caps switching at a time, but the control strategy is completely decoupled. Hope that helps.
Regarding batteries, there is always one concern that I will share.
(a) When you use a capacitor, your voltage balancing logic keeps the voltage in check, as a result you only draw reactive power from cap.
(b) When you have a battery, you might forgo the need of a balancing logic, this means you 'might' draw active power from the battery. This also means that you might be pumping active power into the battery, right? It's a possibility that cannot be easily ruled out.
So how do we proceed? If you want to avoid caps and use batteries, you must at least ensure that you draw active power from the auxiliary batteries that replace caps. Otherwise, you might pump power into a battery, overcharging it beyond rated limits. You can refer my Article on IEEE that discusses a similar scenario at length. Thanks.