What is the best and easiest way to offset a path around a cutout image in Illustrator?

After I want to replace the path with text.

I could do this in Photoshop too (the offset path) but Illustrator has better text capabilities, so i thought I would import the image in Illustrator and do it there.

I would need to print the whole out afterwards, both the image and the text.

I am not sure if Illustrator or Photoshop is better for printing.

The image has a transparent background.
I also will have to be able to use a brush on the offset path so that it exactly folows the path.

How do I do that?