Just for the record, I was able to find a solution to my problem, and my question.
Regarding the error, I found the fix to be a combination using the with_ntdomain_hack = yes, and the modification to the hints file. In order to allow everyone wireless access, while only granting members of the "VPN" group VPN access, I added the following to /etc/raddb/users:


DEFAULT Group == "VPN", Auth-Type = LDAP
       Fall-Through = No

DEFAULT Auth-Type = EAP

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