Just in case anyone else comes across a similar issue to me on this one, I actually fixed it by doing something quite simple, and perhaps obvious.
Whilst following Roman's guide, I was expecting Webpack to create the directories and files, but for some reason it was throwing an error as mentioned in my first post. I got around it by simply creating the file and hey presto, it worked!
I went back to Roman's blog to finish it off, and got a new message on it (see attached image), which makes me think I might as well give up now My extension did install though, so at least I know I can develop if I want to.
It's such a shame that Yootheme got us all excited about this and then just left it behind. Who knows, maybe they will pick it up again, but what's the point in going back to it if they just let it rot for another two years?
I have to admit, October looks really nice to use!