How can I send HTML newsletters?
Outdated documentation is one of the reasons why Simplenews is only in Alpha. Sorry you had a frustrating experience, but a lot of work of porting modules and writing documentation is done in (my) free time. It is one of the many contrib modules that I help maintain.

You're more than welcome to help improving the module and documention so the next person will be able to figure this out faster. Patches or simply  by writing documentation on drupal.org.

The template extension is now .html.twig, which you should quickly see in the templates folder of the module.

Also, the very first paragraph on the project page contains this:


  Simplenews publishes and sends newsletters to lists of subscribers.
  Both anonymous and authenticated users can opt-in to different mailing
  lists. HTML email can be sent by adding Mime Mail module for D7 and
  Swiftmailer for D8.


Swiftmailer requires a composer dependency and is a bit more complicated to install due to that, but it is what we've been using in our projects and should work well.

Also, make sure you enable HTML in the newsletter settings. And possibly try the latest dev versions if you have problems.