Does anyone know if it is possible to be able to setup any of the following
(i) an approval process so sharing of files (with external users) by staff via their Office 365 one drive personal folders - is approved by an admin or someone before it happens?
(ii) notifications to not only the one drive owner on the sharing activity (as seems currently possible) but also to have the alert going to an administrator as well for all user external sharing activities in their personal office 365 one drive folders?
In Security and Compliance center you can create alerts for Sharing. There are many options in there but these are some of them. I also had one created for Anonymous link is created which is in there as well, just have to search around for available options. You can see some of them in screenshot here.
Well alerts don't really prevent people from sharing, instead I would recommend looking at the DLP functionalities. Setting up DLP can be a complex process though and it wouldn't necessarily extend to all files. Another alternative is to use the Advanced Security Management/CAS suites, which allow you to configure "policies" - alerts but with other actions, not just notify. But in general I guess the answer will be no, there is no approval functionality by default, only controls to restrict sharing.