I'm guessing that "Allow multiple responses or update responses with one token?" and the "Enable token-based response persistence?" conflict when attempting to set the survey up like this.
No, they don't conflict as I have both of them enabled on a few of my surveys. They serve two different functions. "
Allow multiple responses or update responses with one token?" does just as it says and as you describe in steps 1-4. "
Enable token-based response persistence? is for users to not lose their answers if their browser crashes.
The problem is your step #5. Changes to the answers change that single entry in the DB. So you can't "track changes". I've come close to your desired behavior (by accident!). With my case there were two responses in the DB with a single token, but I'm pretty sure the user didn't have their previous answers prepopulated when working on the 2nd responses. I achieved the 2 responses-one token by disabling "Allow multiple responses..." and then "resetting" the "Uses left" in the token table to 1 manually after a user completed the survey.
The caveat with my response is that this is all from memory. Someone else might correct any errors in my statements...