Hi taularian,
I'm far from an expert, but I thought I would nonetheless try to get things rolling by offering the beginnings of a response to your questions...
For short-term holdings, I think the advice is generally that you shouldn't be invested in *stocks* because the stock market is volatile... while its overall direction has always been on the rise over the long term, short term, it can go down significantly.
So I would think that the advice about the length of your investment doesn't so much depend on whether something is an ETF or not, but whether it's an investment in stocks or not. Currently, Vanguard Canada does appear to offer a few bond ETFs:
https://www.vanguardcanada.ca/individual/etfs/etfs.htm(see "fixed income" ETFs).
As for minimum amount to invest in an ETF... I'm not sure the advice is current... I think you can open a TFSA account at Questrade without a minimal deposit (or perhaps a small minimum?). The advice that you need a certain amount may have been based on previous minimums that were required by certain services to open an account? At Questrade you can buy your ETFs without a fee (there is a fee to sell them, though).
I don't see how you could go wrong opening up a TFSA account in your scenario -- I would absolutely encourage you to do so. Any capital gain, interest amount or dividend you earn in there is tax-free! If you keep your money in a regular savings account and make a few bucks in interest, that can easily be subject to income tax that eats away at what are small rates to begin with.
And, finally, Way To Go, in accumulating $40k!