You draw distinctions that use idiosyncratic definitions of some fairly standard terms. For example, Chicago defines the terms “manuscript editing,” “line editing,” and “copyediting” as synonymous with each other, and none of them as synonymous with “mechanical editing,” although that is one element of them. Certainly, I agree that an author has a right to expect more than merely mechanical editing unless that is specifically what they have requested. However, I cannot agree that the only route into competent and appropriate freelance editing is internal employment within a publishing house, and that the only clients who should be counted as a relevant part of a freelance editor’s curriculum vitae are those who are traditionally published.
Obviously there is a big difference. I actually started with screenplays (with some mild success) partly due to hearing that as long as you have a good story, the grammatical errors won’t be a big deal. Well, that was not true. Maybe if a producer liked the story or I was already established but every contest I entered always came back with feedback about the grammatical errors. Even if I won or placed as a finalist, I always received critique on that. Very little is spelling error, it was more about structure, etc.