Thank you everyone for your generous feedback. It's given me a lot to think about. I now realize that my question has as much to do with DNS and Apache as with PHP. As we clarify the functionality and essence of the app, I'll post again with more focussed questions.
Based on advice here and elsewhere, I think we're tending toward a an "no framework" MVC approach and sub-directory model to get started. As Per so elegantly stated "The subdirectory approach is easily rewritten to an internal subdomain structure." So if we need to pivot to a subdomain model we can do so. Tim