I think a lot of basic but very useful additions to the Display set could improve work drastically:
allow levels of DS, for example you isolate items using DS, and then again, you could go back to the previous DS instead of resetting it all together and seeing all elements again. So instead of Clear Display Set you would have: Clear DS level 1 / level 2 / all. Often I isolate elements, and then make a new selection to work on a more detailed part of the model. But when I want to get back to the previous DS, I need to Clear the DS and reselect the items to get the same DS again.
allow to save a DS. Like a Saved View, or maybe allow to save the DS to the saved View, making it easy to later on recall the same DS.
I think most of what you describe is already possible using QuickSets.
Used to be in the shift-right-click menu but displaced in the recent versions of Mstn?
Saving between sessions. IIRC, the QS' can not be saved between sessions. This would be good to have.
It would be good to introduce in conjunction with the planned 'hide' functionality.
Also, there seems to some interesting behaviour being down by iTwins called Grouping and Mapping.
Worth tying in. As models get bigger, it would be good to go beyond the manual selection process to isolate/hide elements.