Before sending you to the MSI SDK I should add that I dislike this instance transform concept myself, and have not used it in practice. It might be that I have become a grumpy old man! :-).
MSINEWINSTANCE: Please investigate the MSINEWINSTANCE property and read up on the MSI SDK topic: "Installing Multiple Instances of Products and Patches". And here is perhaps a better example - more practically oriented.
Also some context on why I am not too keen on this feature. Carolyn Napier was on the original MSI team - this is straight from the horse's mouth as they say.
I know some people claim success with these instance transforms (Chris Painter might be able to illuminate my claims here), but I'd rather virtualize in scenarios such as these. Please see this age-old post from serverfault.com: I want to install an MSI twice (please skim all the other answers in that "thread" too).
APP-V: I have almost zero App-V experience, but my guess is that this is what you should try to convince your manager to spend some time on investigating. Maybe call in some favors and talk to guys who are operative in current deployment. They always have the current prevailing prejudice to report - with the tricks that make things work in the real world.
Great if you can let us know how you end up solving the problem.
Disable Repair & Modify: And for the record: disabling repair and modify (buttons only) can be done by setting the ARPNOMODIFY and ARPNOREPAIR properties. But this is not what you are looking for to allow multiple instance installations. MSI is not easily fooled and knows what you have installed and when - no reason to waste time testing these "options". All these two properties do is to hide or disable the modify and repair buttons - yields nothing you need apart from that.