1. Different packs may need different installed versions of a mod. Since all of the mods are in MO I usually add a pack name at the end of the mod name (e.g., " - STEP") to indicate which version it is. Does Mod Picker support this or some other (and perhaps better) way to have different versions of a mod or is it at least indifferent to it?
How the mods are installed in MO isn't really something Mod Picker (the websites) has any relevance to. The desktop application would be where something like this would come into practice. Currently the desktop application only installs a single version of mods, which is what most users would want, I think. Your use case is very specific, and I don't think it's something that needs to be built. Most users want to use a single mod list for a single playthrough, and the desktop application enables that.
On the site itself you can just add those mods to each pack and then specify all of the mod options for the pack + base.
2. I saw comments about creating Fomods. I was wondering how these would be created? Will there be a tool with UI input that allows creating or editing of Fomods; as one example supporting an "install for the xxx pack" option?
Created? I don't really understand this question. FOMODs have no significance on the Mod Picker website - everything is converted into generic "mod options" within the database, with associations set up so we can emulate how files are installed for the purpose of conflict detection. The Mod Picker Utility installs mods per the mod option selection on the mod list being set up (you can select mod options for each mod in the mod list by clicking the gear by it in edit mode).
3. When installing mods that include portions that will be merged (usually patch plugins but sometimes also resources) the installation might need to be different than the standard install if the patch plugins need to be put into a separate mod. Merge Plugins supports copying resources, but it doesn't seem to support making this selective by plugin. Often a patch plugin that will be merged is part of an overall mod that includes multiple plugins and resources, but typically only the patch plugins are merged. The merge in the REGS guide for "Interesting NPCs" is an example of this. It includes some patch plugins and a mod with both plugins and resources. The patch plugins were in most cases initially located along with the rest of a mod.
I don't see a question here. If patches are being merged there should be no need to "copy general assets" during the merge, so the option can be disabled for that merge.
4. Dreadfloop gave an example of edits to "Relighting Skyrim" for using xEdit to edit a source plugin vs. creating a patch that included only vanilla records to override onea in RS. With location mods it isn't an either/or situation. There are several examples in the REGS guide of using xEdit to remove sets of records associated with a particular location. I am not aware of any other relatively straightforward way to do this.
Again, I don't see a question here. Are you asking for a way for Mod Picker to automate the removal of certain records from certain ESP files? It's possible, but I don't see it happening any time soon. There are other priorities. Honestly, it sounds to me like what you really need to do is just distribute a modified version of the ESP file for the mod list in question. Get the required permissions from the mod author(s) and either have them add the modified ESP to the mod as a mod option OR create a separate mod with the ESP file.