Got it working. This required a visit to Atari Age to understand what was going on.
There are some protections in A800 disks that lr-Atari800 can't get around but Altarri can. This was one of them, hence the odd error message. The emulator reads the disk, but it's not jumping over the sector of copy protection.
I was graciously given a "newer" version of CA that had the protections removed.
How are you changing the emulator configuration ?
Since you're using the lr-atari800, there's a Core option that sets the machine type, when you change that option it should be automatically saved. Is this how you change the machine type ?
And it occurs to me that having separate core configs per content folder won't solve the Atari 8 bit problems, because this script modifies both the core options and the core's own config file in order to get to all the settings. hmm.
@spudsmctoole Answering Your Own Question From Six Months Ago Department: it turns out that my ATARI800.CFG file stipulated a default game cartridge, and this was overriding the presence of the XEX file. Remove that line and all is well :)