Is there a way to do away with the chest type mod settings and just allow the user to use any set of chests of the same type without having to change the mod setting everytime the user wants to change the type of chest? Seems like an unnecessary chore/step. If it's a problem with mixed chests in the code it would be a lot better IMO that an exception is thrown and the user is notified in game that they can't use mixed chest type sets.
Install mod https://mods.factorio.com/mod/WideChestsAllTypes . It will allow merging of any chests of same type together (still no merging of mixed types). Beware, it will increase a memory requirement of this mod.
There is something that could be done but it's only delaying the problem. Better question is if you really need the all of the 1000x1000, 1000x999, 999x1000, 1000x998, 998x1000, ... chests (all the way to the 1x1).
I don't. Just all chest types of 1xn where n<100. Only see the benefit of this mod for modded train stations where you want something compact but there are more than a couple types of products being loaded or unloaded. Other cases are either quite corner/obscure of there is something else, mostly in vanilla, that works just fine.