Since the default firmware of the CYPD3125 is an I2C bootloader I assume that I need to install the EZ-PD Configuration Utility on my system in order to configure the port controller. Can you confirm?
Yes, your understanding is correct. The EZ-PD Configuration Utility downloads the configuration (*.cyacd format) using USB commands which is sent over the I2C line to CCG3 using a USB-Serial converter device like the one present in the CY4531 EVK.
Alternatively, you can directly program the CCG3 with the firmware (*.hex format) using SWD programming as well.