Thank you
@GerbilSoft for actually taking the time to add thoughtful insight into the topic instead of just hurling vitriol. I never once claimed to have the knowledge to actually know how any of this worked. In fact, I outright stated in the OP that I wanted to be corrected if I was wrong about and told the proper information.
The whole DS launcher post was mostly a knee-jerk reaction to the whole "DS NEVAR!" attitude of the post I replied to. Sifting through 3dbrew to see exactly what steps the 3DS takes when shifting into DSi mode is rather confusing. The reason I even mentioned being able to harness the ARM11 was because I was envisioning an implementation similar to Nintendont, where we're essentially running the backwards-compatible software (DS in this case) while not truly exiting the native mode of the console. Theoretically, a way to run DS software while in 3DS mode would still have access to 3DS mode system resources. If I'm wrong, then I gladly accept it and would like to be shown where my logic fails.
But, that's getting slightly off-subject and was not the originally envisioned purpose of RedTWL. Phases 1 & 2 of your post are pretty much what I was thinking of when coming up with the idea. RedTWL would be a way to run DSiWare without having to install it to SysNAND nor be limited in capacity size to the amount of space that Nintendo designed the 3DS with. If any of the breakthroughs discovered along the way can somehow contribute to a DS rom loader, that would be a fortuitous-but-unintended result of RedTWL. To refer back to my label of "endgame CFW development," DS rom loading would be considered the endgame of the endgame. Too many pieces of the puzzle would have to come together to make it work, so it's best to not even focus on it until we can actually make the individual puzzle pieces themselves. Putting the carriage before the horse gets us nowhere.