Part of my answer is here:
Using git_repository and local_repository, I can achieve most of the things I was looking for.
Still have some questions about developing in these two different repos.
1. git_repository requires a commit or tag, which means any change in my_library must be accompanied by a commit in application repo. Can I say "latest"?
2. local_repository requires an absolute path to the repo. Can this is relative path so that I can make my_library as part of my application using git-subtree?
Thanks,
Sailesh