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.
Gentoo and Alpine are both really great distributions.
And with lots of polish and convenient features.
Yes, I thrive in it.
That doesn't mean it is the only option.
But there are other options with Silverblue.
Ubuntu usually provides you with system working out of the box. Same goes for Fedora and its spins. Arch is DIY distribution, which means that the "missing" stuff you usually have to install/configure yourself. archinstall gives you just a basic start.
If you don't know your way around bare window managers, then yeah, it would be a good idea to try with things preconfigured: EndeavourOS should give you that, Fedora Sway spin also.
Or you could bite the bullet and try to provide the missing things yourself and learn in the process. What are you missing?
Check ublue approach like for example in this repo: https://github.com/ublue-os/beyond
In other words, leverage native OCI containers.