Like you,I use DVDWS2 a lot ( Im no expert though) and find that you can achieve what you want with it but probably not automatically .
You can create a customised menu template with attribute for each button saved after you have made one that satisfies your requirements.
Im sure some persistence with experimenting on the attribute of each button will get a free flow situation that will not give you a migraine but once you crack it it really wont take more than 5 mins.
DVD moviefactory will probably do it your proposed way but it is less configurable than DVDWS2.. Keep trying I say , You seem to be more than halfway there and are giving yourself less credit than you deserve.
Encore is harder to use and even less automatic and DVDit (light version) is less configurable. The full version will give similar results in default mode to DVDWS2 .