Just wanted to update this post a bit since I figured some things out.
1) The error was 403.14. I made a typo in OP. And I think the error is irrelevant.

2) I eventually found that I have to manually add the site to IIS, which I did not expect. After adding the site, it worked (albeit slow, but that is something I have to figure out).

3) Considering I had to add the site manually, I found that this would be a relatively easy job of sharing IIS configurations and DFS replicating whatever folder I want to be the root of the new website.

On one hand I am glad that this is a bit more straightforward than what I was afraid it would be, but on the other hand it isn't as automated as I would have liked. Wish there was more documentation on how DNN redirects GET requests from the dotnetnuke root folder to the proper portal - and if there was some concerns about performance from not allowing IIS to direct GET requests instead of the application.

Thank you for your response. I have been picking up a bit on the functionality of DNN, but only after struggling through (mostly) self induced errors.

Currently I am using the environment that you suggested, but using DFS to replicate the IIS settings and the dotnetnuke folder between the webheads (I kind of wish the web farm configuration guide would touch on this, but maybe this set up is obvious for everyone else other than me). The caching system is something I haven't run into yet - is this relating to allowing persistent connections between client/server? The load balancer that I am currently using (Windows ARR) gives some caching mechanism that I have not put much thought into yet.