Check ublue approach like for example in this repo: https://github.com/ublue-os/beyond

In other words, leverage native OCI containers.

Gnome Console since it is consistent with the rest of Gnome and works well enough.

Those configuration files are for managing system’s package manager, so I don’t think $HOME would be a better place.

From lack of a better solution, I would symlink the folder or use stow --target /etc flag if you use stow for managing dotfiles.

Yes, I thrive in it.