I asked Support why I was unable to use _USTN_WORKSETTEMPLATE to define the workset template for a specific workspace. Here is the response I received:
"Thank you so much for your response , I have investigated more to get information or any workaround to modify or add the variable from workspace.template configuration file or workset.template configuration file but there are no results which can control the template selection. also I discuss this with the testing team and got confirmed that this would be an enhancement ."
Rod Wing uses this variable with others in Method #1 of this thread. However, due to issues I have mentioned here, I haven't been able to figure out how to get those variables to work without opening ORD, selecting my workspace and workset, opening a drawing in that workset, closing MicroStation and reopening; and even then it doesn't always seem to work. This is far from optimal. It also offers no way to copy in project seeds or template libraries, but that's secondary to being able to reliably create proper workset CFG/DGNWS files.
While this variable may work within an "established" workspace, it appears to not function when the workspace is selected.
I know that Rod had mentioned a custom tool to create worksets. I may have to go that way. I know how to get VB to create and write into a text file, create directories, and copy and rename files, so it seems as if the bulk of this can be done without needing MicroStation at all. The hardest part will be remembering how to code with forms as well as modules...The DGNWS will be created when the workset is actually chosen, so I believe I can safely ignore that - as long as I've done the "choose workspace, open file, get out, get back in" before I try to use my workset so that the DGNWS template variable can be read correctly. Again, not optimal...