How to determine which connectivity and peripherals are needed in a microcontroller?
In industry, do developers generally try to simplify things ... even if it's an overkill in the sense of potentially adding more uC capability ...

Why do you care if the microprocessor is &quot;too capable&quot;?  You care that it's capable enough, then you care about the lifetime cost of the product (to oversimplify: engineering time / number of boards + cost per board)

is it more a matter of the cost driving whether to choose a uC

In general it should be, but you need to be careful that you account for all the costs.  If you're saving $0.10 per board in bill of materials cost, but you spend $100 per board more on engineering costs, then you've lost money on that decision.

Unfortunately, when I include Bluetooth and LCD as necessary peripherals in my searching...

Those are pretty specialized items, so it's not a surprise that they narrow your choices.
In your shoes, I would assess the total cost of a board with all that stuff on the micro, and the cost with everything but that on the micro and those two separate.
You should also be aware that if you just put a Bluetooth module on your board then the module comes with all the necessary certifications with the Bluetooth marketing association (or whatever its correct name is), as well as FCC certification.
As soon as you step away from a module, you're on your own for getting that board certified.  That's a huge expense if it's only amortized over 1000 boards or so (and ever much more so if it's only amortized over 10).  There's definitely a tipping point where it makes sense to build the board with some Bluetooth device rather than a module -- but I think you'll find it's north of anything a sole proprietor business is going to be doing.