I agree, although in the interest of UI simplicity, I believe this goal can be achieved without requiring a separate mode. Implementing the items above should go a long way toward this. Everything can be summarized in one statement: sacrifice "perfect following distance" for smoothness of acceleration and braking, and everything will be nicer.
As I said in the initial post here, I think that the degree to which you'd rather have a smooth ride or a rigid following distance is implicit in the choice of following distance setting. A close following distance inherently has to follow the other car tightly, and I don't know why you'd choose a long distance if you wanted an exact match to the other car.
Walter