Re welding, if it were me, I'd be inclined to start looking at used bikes, and just transfer all the bits over.
Hate to say it, but I wonder if the bike stand clamp could have put a stress on the weld area, and it went from there following this line...couch metallurgy on my part of course...
All of my bikes were purchased used, so I'd probably try welding myself. But, in the case of the OP, it will probably be a warranty replacement. Then it depends on whether he gets a new frame or a new complete bike. Upgrades?
You are right, there are lots of good used frames available, often for very cheap depending on the exact bicycle.
I don't think anybody clamps a bikestand down near the bottom bracket. And, clamping at the top fo the seat tube is unlikely to have significant effect that low.
That area gets quite a bit of protection from the crankset.
I think it is simply fatigue (although perhaps compounded by welding problems).
It is possible a double butted tube was cut outside the butted area, although seat tubes are often designed a bit differently than the other tubes.