Sleep and USB-C display work out-of-the-box on my Lenovo T470s running Ubuntu 18. I've even used a USB-C hub with Ethernet, HDMI, USB3, and power delivery. Just one wire for everything. Sleep has worked for years now. YMMV
meanwhile the sleeping t470s drains the battery by keeping the RAM alive and eventually runs out. the arch wiki has some content on this, but it did not make me hopeful to get it to work
systemctl hybrid-sleep
And configure it as the lid close action trough logind conf (or your DE's).
It works differently, though (AFAIK). It saves the state to both RAM and disk, so when battery eventually runs out, you can resume from disk. The solution you offer seems interesting. It would just need a RTC wakeup event, so that the system goes all the way to S5 after a set time.