First of all, you can design pages specifically for IWP that don't look so bad, and hide the status area so users get the same experience as a typical web page. This does, however, require that you add buttons to your pages to get the functionality you need, but that's also true in CWP.
As for the PHP Site Assistant, it does support user-defined themes, but you can also just start with the pages that the PHPSA generates and modify them from there. You'd almost certainly be doing that anyway, so I don't know if it would be worth bothering to create your own theme unless you planned to use the PHPSA to generate sites over and over again. Usually it's more of a one-shot deal.
Does this also work with a login screen?
Does what work?