I think this is a pretty good analysis, but I want to add onto it a little.

From where I'm standing, it seems like the reason they care so much about riling up their base is because their actual policies and interests hurt the working class rust belt people that are their main constituency. So they have to come up with some huge overriding cultural battle for their base to get really invested in fighting, to make them feel like they have to vote Republican and oppose the Democrats no matter what, and to distract them from the underlying social and economic issues that are the source of their undirected frustration in the first place, and deflect their anger onto a scapegoat that they can blame for all society's ills without actually changing the system.

Because if they didn't, their base would continue going down their populist route. They might start actually realizing how bad capitalism is for them and fighting against it in their own weird way. Some might see the benefit of Medicaid and Medicare and food stamps to working class people, or taxing rich more and the middle class less, and go over to the Democrats. And that could actually be pretty unprofitable for the elites and their donors and lobbyists.

Not to say that this would be exactly a good option either, though, because I think there is still a ton of genuine nationalism, traditionalism, anti-intellectualism, conservatism, and so on among today's right wing, it isn't all trumped up by their leaders, and that's going to tinge their social and economic understandings, so even if they went down this latter route, it would still end up being a conspirational populism that looks disturbingly like fascism.