I don't know if you can convert non-bonus payment into bonus money when a bonus is already in place.
You can convert whatever the frick you want into a signing bonus. Roster bonus, base salary, MAYBE even a given year's prorated signing bonus (no team would ever be in such a bad position to even have to do that).
I think the big reason they started this off with Lofton was their way of saying "We want you to be a big part of this 3-4 defense in the future." It wasn't likely, but Lofton was a quasi-legit possibility at being cut (would save $2.6m). I'm still of the opinion that 4-3 LB/3-4 ILB is the best place to be terrible at on a defense (see: 2009 SB win) and it's the easiest position to find difference makers in the draft (see: last billion DROYs).