JAZAKALLAH Brother. So nice of you! As for the airfilter, yes, only side cutting is required, these are steps
1.Plastic that You've boxed red have to be Cutout with Hotted Knife to fitto shape of the Box that holds it.
2.To make it perfect airtight First you've to remove Rubber Seal from the Sidings of Filter
3.Remove the plastic part with knife, also short the rubber seal to fit on to the sidings after removing it.
4.Fix rubber on Sidings & Close the box.
As for the market of Islamabad I've not much Idea, because here in Lahore TOYOTA Fielder is much Popular than AIRWAVE, & also the airfilter isn't available easily. As for many other parts like Oil Filter they are same to City, so there is no issue. Other wise find some Shop that changes the filter paper(YELLOW PART).
The Engine Oil options are:
1.CALTEX Formula, as in the city fan club a Member Fahad has attained 22Km/Ltr on the 1300cc i-DSI, Price is almost 2200
2.HONDA Synthetic Oil is also a Good Option, it can give you 20Km/Ltr, & as its Specifically for Honda, I think its a problem free Oil. Almost Rs.2200
3.Aamir Bhai(accord7362) had used Mobil One for there STEERMATIC, Not much idea.But its price last time i Checked was 6000. & i think its better to use a Good Quality oil & Change it after 2500Kms Rather than buy some expensive & Drive it for longer times.
For some more infos i think you should contact Aamir Bhai ! Because the Airwave & Steermatic are built n same platform & much much similarities. Only the Difference of body.