Thanks all for the input! I work in book publishing and have a middle-of-the-road resume, so while there are job opportunities (and I have had several interviews over the last two months) it is not a field where the pickings are that easy.
Quite frankly I do not expect to get the internal job offer. I think I am a great candidate but that I am not seen as a viable choice for some reason. I like aspects of my current role--lots of travel lined up over the next three months if I stay--but HR essentially told me after the internal interview that I was not who they are looking for.
What I will likely do post-negotiation is tell my direct boss in person, then call or email the hiring manager/dept head, and either copy in HR or tell them separately. It would be great if they could figure out that I have value but the chances are low. I would be open to coming back to the department down the line, but right now I am feeling some pressure to get better pay and a higher title for my resume so that I am not seen as stagnating. My direct boss is great in some respects but I have been chaffing at not being solely in charge of my own work.
Formulating a response that looks like the below for the exteranal company (might be too soft? I have literally never been in this position in my life):
Thank you very much for offering me the position of X. I am eager to become a part of Y's editorial team and excited by the opportunity to work toward making a real contribution. The position and areas of responsibility are an excellent fit with both my skill set and my career goals, and I am ready to give my best efforts to the role.
I have evaluated your current offer and benefits, and would like to discuss a few of the compensation details in more detail, particularly with regard to a possible match in your 401k plan and the initial vacation time. As I currently receive a 6% 401k match and 20 days of vacation yearly, would it be possible to also receive these benefits from you? If the 401k match and vacation are standard and inflexible, would it be possible to increase the base salary in order to compensate for the loss as compared with my current position?
I am greatly interested in working with Y, as I believe this position will help me develop my current strengths and capabilities, as well as develop new ones. I am also very impressed by the small, familial feeling of the office and would love to come on board if we are able to come slightly closer together on these few items.
Many thanks again for your consideration and wishing you a wonderful weekend,