I think we need to keep in mind that SWDE is a lossy version of the original video, so perhaps we should not be too concerned about lossy soundtracks to accompany it.

It is also important to understand where the audio source originates from: if there has been any lossy compression or conversion used anywhere in it's history, then using lossless compression for the final version is not going to restore quality that has already been lost: the best it can do is retain the quality that is there. However, I understand that a high enough bitrate lossy compression will sound indistinguishable to most ears from a lossless compression depending on the acoustic properties of the source.

Quite frankly, for stereo soundtracks obtained from laserdisc I doubt anyone would notice a difference between DD 640 and TrueHD.

In terms of authoring a Bluray, I actually think it would be preferable to have the extras on a separate disc: this relaxes any constraints on the movie itself. When you do this, you no longer really need menus for the movie itself (nice to have, yes).

Once freed from menus on the movie, it is very easy to convert an mkv and whatever combination of soundtracks one desires into Bluray format using TSmuxer.

For myself, I will be sticking with mkv for the movie anyway, as I find menus too restrictive. However, I like the idea of a menu driven extras disc.