Can anyone tell me what project and render settings I should use?
I dont think I am too particular whether final video is WS or not. 80% of the video is a WS source. Prefer no letteroxing (black boxes above and below)
Well, if you want the output to be 4:3 then set up the project for 4:3. If you want the output to be 16:9 then set up the project to be 16:9. That's really a choice that you have to make.
Put all the clips on the timeline. For the ones that don't match the project settings open up Pan/Crop, right-mouse-button click in the cropping frame, and choose Match output aspect.
decided to crop 4:3 to 16:9 and rendered it out as DVDA NTSC WS Video Stream. I checked off Stretch Video and project properties are WS
odd thing was the original 4:3 segments had a funny artifact - horizontal lines which seemed worse with more motion involved (though no problems with original footage)
Those look like interlacing artifacts. Did you try deinterlacing?
You do realize that playing 4:3 in a 16:9 project either gives you black bars on the sides, a distorted image (stretched widthwise) or loss of viewable footage and reduction of resolution, depending on how you do it.