I actually had a go at this myself 15 years ago, with a project I called Djng: https://github.com/simonw/djng - more details on that here: https://simonwillison.net/2009/May/19/djng/
For me the two missing pieces were models and a path to migrate to a full project once it outgrew a single file, so I wrote nanodjango (https://github.com/radiac/nanodjango/, formerly django-flasky) - you can use the ORM and admin site, and I recently added a "convert" command to automatically break up a single page app into a full Django project structure.
I've been using it for a couple of years for prototyping/experimenting and putting together small apps, and with the new features this year feels like it's a really practical alternative to flask.
Are you planning to add some kind of API serving functionality (either by integrating something like Django Ninja or even raw Pydantic)? I think such single file frameworks are great candidates to implement microservices.
Regarding API serving, I'm planning on making it easier to use third party apps; the main obstacle is registering `includes` urls, which is doable at the moment but involves manually appending a path to `nanodjango.urls.urlpatterns`. I want to expand route registration to give a nicer internal api, then once that's in place Django Ninja should work pretty much out of the box - the only different should be how you register the url.
The human soul yearns for the simplicity of php or cgi-bin hosting, without the horrors of PHP or C
As a Django user that shares your frustrations with settings.py, I wish this had panned out.
I wasn't particularly good at sticking with open source projects like this and pushing them forwards back in 2009. I've since learned how to do that but it took me another decade to get there.