On the clever hack: there are lots of version-control systems that enable you to create "branches", edit on different branches separately, and (if you wish) merge the branches back together. But it sounds like MS Word reviewers are enough for your purposes.

On copy-editing: I published a book two years ago through a reasonably-respectable academic publisher (College Publications) that had (AFAICT) no copy-editing budget whatsoever. Authors were expected to send camera-ready copy (although that wasn't a prerequisite for accept/reject decisions). Of course, copy-editing technical academic writing is probably a lot more expensive than copy-editing fiction, and most academic authors are used to typesetting their own equations and figures anyway.