Magento – Best way to convert configurable products to simple products

I think the problem is not in the rule conditions itself. It's in the way prices are displayed and calculated by Magento for configurable products. The price of the configurable product is always leading unless you specify different price on the Associated Products tab. If you use a grouped product this would become possible, because they rely more on the simple product. But this is of course a completely different approach and probably not what you want in an Apparel store.

Here is an idea.
In order to have something preselected for a configurable product you must rewrite Mage_Catalog_Block_Product_View_Type_Configurable::getJsonConfig.
More exactly this part.

    $preconfiguredFlag = $currentProduct->hasPreconfiguredValues();
    if ($preconfiguredFlag) {
        $preconfiguredValues = $currentProduct->getPreconfiguredValues();
        $defaultValues       = array();
    }

Or this part

        if ($preconfiguredFlag) {
            $configValue = $preconfiguredValues->getData('super_attribute/' . $attributeId);
            if ($configValue) {
                $defaultValues[$attributeId] = $configValue;
            }
        }

You can add your custom logic around these lines of code.
I would go with this approach.
If after executing the code above defaultValues is an empty array add your logic. If it's not empty it means that the use clicked on the 'edit' button from the cart and you shouldn't interfere with that.

Now the second part.
How to get the minimum price.
Here is an explanation about how to get the min and max price from the configurable product combinations.

Other than this, I can recommend you this extension. Among other features it allows you to set from the backend the default configuration for a configurable product just by selecting a simple product associated to the configurable one.
The downside of it is that you have to edit every configurable product to set this.