But is it true that, for V a commutative theory, TW-V-monoids form a variety again, with operations given by those of V (applied pointwise on endomorphisms) plus the monoid structure coming from composition - i.e. the structure of the set endomorphisms?
Yes, this is true. And the simplest example of a TW-V-monoid is where V is abelian groups whereupon TW-V-monoids are simply rings (unital, not necessarily commutative).
What led us to write our paper is that we couldn't find an accurate description of what we wanted (the full structure on unstable operations in a "generator-relation" type description). After a paper chase through near rings and composition rings, we finally came across Tall and Wraith's 1970 paper in PLMS and the Borger-Wieland paper. Neither was quite what we wanted, though, since the algebras from cohomology theories are more complicated than "mere" algebras. The Hunting of the Hopf Ring paper (we were sure that a referee was going to complain about the title, by the way) concentrates on those technicalities rather than trying to explain the simple details of TW V-monoids. We're currently writing another paper which tries to lay out the simpler ideas and which will include a proof of the commutative case (not that this is difficult).
The slogan "TW V-monoids are that-which-acts-on-V-monoids" is intended as an adaptation of the slogan "Rings are that-which-acts-on-abelian-groups". The story is more complicated because it is not automatic that Hom(V,V) is a TW V-monoid. One simple case where it is is when V is a finite ring, but in general one needs a Kunneth-type formula to hold. Nonetheless, it is quite easy to find lots of examples of TW V-monoids and the Tall-Wraith paper, and the Borger-Wieland paper contain plenty of examples (as will ours). The point about TW V-monoids being the thing that acts is that they are the representable things that act. The general idea is that whenever you have a set-with-structure acting on a V-algebra then there is an associated Tall-Wraith V-monoid. Of course, one might wonder why bother with that bloated gadget, but then one might wonder why bother with group rings when you already have the group.
I feel that this isn't really a sufficient answer, though. My problem is that we came at this with examples in hand that we already knew about and wanted some algebraic way of encoding the structure that we already had. As we couldn't find such a description, we invented one (and we hope that Tall and Wraith don't object to the approbation of their names!). So for us, the intuition is all in cohomology operations and not in "bare algebra". If you can expand on what you are looking for a little, I may be able to refine my answer somewhat.