We don't support regex or substring syntax when it comes to Deployment Manager variables. You can reference Deployment Manager variables from other variables
as of version 2.0.8. So you can define '$RedGateWebsiteName' to be 'CDS Console $(RedGateReleaseNumber)' but that will create a website name ending with the release version.
If you would like to create a website with only major and minor version, you can use postDeploy.ps1 powershell script which will be run after deployment. You can manipulate the website name after deployment from within this script.
I am also wondering if one can set a variable defined via the deployment manager from a powershell script. I know I can read some variables but can I also set them?
Sorry, we don't support setting of variables either.