I don't quite see what you mean by in situ. The wheel will want to come out when you respace the axle so it sits in the middle of the frame.
As for doing each nipple at a time, I would loosen all 18 drivesides, then tighten all 18 non-drivesides. The order isn't important, but you must make sure that you don't over- tighten or -slacken any individual nipples beyond half a turn, otherwise it will mess up the wheel's tension.
Loosen all drive, tighten all non-drive and that should be it, or do you repeat the process until it looks about right?
By in-situ I meant do you re-dish the wheel on the bike (which now seems a daft question since it makes sense to turn the bike upside-down and do exactly that - I think)
Half turn loose all drive side, then half turn tighten all non drive side.
You will need to repeat above sequence as many times as it takes.
You stop when you have the centering you require.
But you also stop before the drive side spokes have fallen out of the drive side nipples. Drive side spokes are shorter than non drive side on a dished wheel and require a certain amount of thread still engaged with the spoke nipple thread.
I would suggest you do not go for totally undished, compromise on less dished than currently. Then use spacers behind freewheel and bottom bracket and/or chainrings to achieve chain alignment.
Using the frame as a truing/wheel stand makes sense
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