Posting this in case it is helpful to somebody else.
AVR worked. Was fairly straight forward.
I took a one way rental car to cross over the border from Ambassador bridge connection Windsor and Detroit.
Officer (@ booth): Hi
Me: Good evening.
Officer (booth): Show me your identification. Are you a citizen?
Me: Gave him my Passport and I797. No.
Officer (booth): Are you a permanent resident?
Me: I am on H1B visa.
Officer (booth): Did you recently get this I797 Approval notice?
Me: (the question scared be a bit). I fumbled, said No. I received it last week.
Officer (booth): Are you entering on this I94 for the first time?
Officer (booth): You will need to pull up the car, go inside. You need to get it entered in the system since it is your first time.
Officer was fairly assuring in letting me know that there was no matter of concern.
I pull up to the parking area. An officer advises me to pull up. I stop just a few centimeters away from where the officer had pointed. He asked me to reverse. I did so and he told me to stop after a sec. I think it was just one of their mind games. He asked me to get all the documents I need and leave everything in the car including phone and laptop. He told me I cannot take my bag pack. Assembled all my documents in a plastic bag. He was surprised at the number of documents I had. I told him I just wanted to be extra careful.
Went inside the interview room. Was advised to sign my name on a sheet of paper and sit down.
Got called up after 10-15 minutes.
Officer (interview room): So Mr, What are you upto?
Officer (interview room): What are you upto?
Me: I am travelling back to Naperville, IL. Gave him passport and I797.
Officer (interview room): What have you got there?
Officer (interview room): So you are here for I94?
Officer (interview room): Your previous visa expired?
Me: Yes. An extension was applied.
Officer (interview room): Ok, go ahead and take a seat. I will call you in sometime.
I waited for another 10 mins.
Officer (interview room): Bud, step up, and present your 4 fingers.
I gave my fingerprints and took a sigh of relief.
Waited for another 5 mins.
Officer (interview room): Bud, you are all set. do you have anything to declare?
Officer (interview room):What car are you driving.
Me: Black, Chevy Malibu.
I had not checked the rental car model in all the hurry. But I did not know another chevy model except for Malibu. I was actually driving a sonic. Fortunately, it did not create any issues as the officer did not verify it.
Officer handed me the passport with the I-94 stapled. Checked it. Went back to the car and safely drove myself back into USA.
It was a fairly straight forward and hassle free experience.