Hey jrl,
My job title is “mechanical designer” (some call it “design engineer”) and is pretty much what you described. Somewhere in between industrial design and engineering. I pursued the position for pretty much the same reasons you describe. My degree is in engineering, but that was only because I hadn’t heard about industrial design when I started my degree. By the time I found out, I was already half way through my program and wanted to finish it. I almost did a second degree in design, but was able to get hired without that by working my way into the industry during the last few years of my engineering degree - getting an internship at a design studio, as well as learning a lot from these forums.
I think the path you described is a pretty solid one for what you’re looking at. It really depends on what level of engineering knowledge you think you’ll need. A full ID degree will give you a much better head start. I use about 3 years of my engineering degree, the 4th was mostly projects which were valuable because I had the flexibility to make them design projects, and great for confidence and practice in my abilities, but not a lot of new knowledge relevant to design. I’m also the only technical person at our studio, so some more in-depth knowledge is vital. If you’re working in a larger group, 2 years will probably be fine.
Let me know if you have any more questions!