It would be great if this could be done for non-consecutive commits also - https://smartgit.userecho.com/communities/1/topics/1677-add-ability-to-squash-non-contiguous-commits

A related request is https://smartgit.userecho.com/communities/1/topics/1677-add-ability-to-squash-non-contiguous-commits. Same end goal, but using selection and menu rather than drag/drop.

I would love to see this also. A variation might be ability to select the target commit and have an option for "commit and squash to this commit". So commit select would happen in log view rather than commit pane (which seems like it might be easier to implement).

This would be very helpful and I agree #4 seems the best way to go. Basically a 
$lineNumber$ needs to be added to the argument variables list and the context menu in Changes and other file views should include Open.