I certainly think it comes closer to the reality of what play via a VTT environment is now and likely will become. How WotC responds to the suggested description will also tell you a lot about whether they're interested truly in VTTs being vibrant and healthy.
I would add in verbiage along the lines of "including but not limited to..." in your description as follows; "VTTs may automate and enhance common TTRPG gameplay experiences including but not limited to custom 2D and 3d imagery, animations, lighting, representations of character vision, environmental effects, Fx, sounds, virtual reality experiences, augmented reality experiences, or other technologies that enhance the play experience.". This is because the above are what you currently envision now, but it's possible something will come along a year or two years or more down the road that you want to implement and you could see WotC legal being very strict about the wording, especially if said feature/functionality is something they are working to add into their own VTT. The added verbiage may give a VTT owner too much latitude for WotC's liking, but IMO knowing that in the beginning has value for SmiteWorks.
Any badging will quickly become a quasi "stamp of authorization/approval" among the larger community for 3PP (should there be any) and that's really what I think WotC intends it as; this product complies with OGL v1.2. So having to remove the logo would mean the product somehow falls short of that mark. Whether this would be seen as making a big enough distinction for WotC in my mind is a bit of a coin flip at best. Someone either shows a badge or if not they can still go with the "Compatible with the xth edition of the world's most popular role playing game." and in the eyes of the average consumer probably achieve the same thing, which is likely not what WotC wants. I do however think this is a good place to start a discussion from.