Can i install the renewed CA cert as-is (without having "Certificate Policies" attribute injected within it) ?
yes, you can install it. But certificate will not have certificate policies.
While installing the renewed CA cert, will the CA look for CAPolicy.inf file ?
no. CA looks for CAPolicy.inf only during renewal request generation.
Will the renewal fail if CAPolicy.inf file is not updated within C:\Windows directory ?
CAPolicy.inf file is not required. Though, it is often used on issuing CAs to define custom extensions for CA certificate, like certificate policies.
Post installation, will it create any issue to end users ?
Does any application is configured to look at policies? If not, then there will be no issues. And you must remove certificate policies extension from certificate templates if configured. If CA certificate doesn't have certificate policies extension, then it cannot add certificate policies extension in issued certificates.
Can I place the CApolicy.inf file in C:\windows directory and regenerate the CSR and sign it again ?
yes. However, you must complete current certificate renewal before you get a chance to generate new request.
I will be renewing certificate with same key.
no, this is absolutely a bad idea. CA certificates shall always generate new key pair.
So will it bump the CA version number again ?