Unless I don’t fully understand what you are trying to do, this should be possible with Encore 2.0 by setting the menu default buttons to Active Audio/Subtitle Track, along with the Specify Link dialog, indicate which audio and subtitle track to play in the timeline.
To be honest, the market is moving ever more quickly away from VCD and SVCD, so I don’t see this as an oversight as much as a deliberate concentration of resources into more a future-proof format.
My best guess would be that you build a DVD, then rip it and re-encode assets to MPEG-1 for use in VCD/SVCD. You should be able to find more info on VCD/SVCD authoring at https://www.videohelp.com than you would here.
DVD subpictures don’t support blending modes or dropshadows/glows or other opacity-type effects. DVD subpictures by definition are 2 bit color tables, which means one color and one opacity per subpicture.