Homebrew PCBs

I think that the method you recall are far most complicated and prone 
to failure than to apply a real soldermask. As you stated you have to 
be very precise with the alignment and the squeguee. If you use a real 
dry-film soldermask you only have to create your soldermask artwork and 
align it over your bare copper pads. Once you are ok with the alignment 
you only fix it with scoth tape and that is all. You only then expose, 
develop, cure, and you can have any pitch that you want, even LQFP or 
smaller.