I think TT is spot on here. Lydiard was pre-HRM and so everything, by necessity, was done by perceived exertion.
When TT says,"If your HR goes above your ideal training rate from time to time, that is not a problem, so long as over the course of the run you are not building up lactic acid" he has defined precisely what Lydiard's guys were doing.
"Best aerobic pace" or "Maximum steady state" would not be a set HR or pace as it would vary depending on whether they were running 7 miles or 27 miles - the point was the level of exertion at the END of the run. IN other words it should never take so much out of them so as to prevent the next day's workout.
BUt if they WERE tired they WOULD run easy or miss a day (Snell has one on record on this). The thing that I wonder about is whether if they had of had HRM and HAD kept within pre-set limits even on hills, whether they would have needed to ease off as much or would have better maintained the levels day in and day out.
Re. Hills - he used hills for specific strengthening work after the conditioning phase. During the conditioning phase it was just a case of running up them as TT described. The "Hill phase" was totally another thing - it involved bounding/springing up the hills, jogging at the top, running fast DOWN the hills and some leg speed at the bottom in addition to more jogging! Not to be attempted until VERY conditioned...
But, BR, aren't you doing some easier stuff now, rather than "best aerobic pace"..? ;-)