Currently you can edit a range of automation by doing the following:
Why is it needed to click on the range to activate the icon change and dragging up and down? I can’t see anything else you can do in the active range with the draw tool other than dragging it up and down. It also makes this ability somewhat hidden.
I’m not sure to understand, here when switching to draw tool the icon changes immediately and I can start dragging the previously selected automation range without a preliminary click.
Each tool in Ardour operates on selected things.
Changing tools usually clears selection.
The workflow you describe is an unusual hybrid. We did not want to add a dedicated tool to operate on automation + time-range range. Especially since it is a rare case to do such edits and there are already too many tools.
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After your step 2, the common thing is to copy/paste/delete/arrange the selection, or otherwise operate on the time-selection (mark ranges, arrangement sections etc).
PS. step 4 should not be needed. you can directly drag.
I am not talking about the change to pencil, I am talking about the further change to the dot with arrows above and below. It made it look to me like that needed to be activated but yeah, you can go and move it straight away.
I’d say the icon changing is confusing (at least it was to me). You also get this with the dot with arrows icon: move out the range and it resets to being a pencil until you use the mouse icon. It perhaps should always be the dot with arrows icon whilst in the range selection regardless. That way it indicates a little clearer the change you can make.
Yes, maybe changing the icon to 
when hovering a range-selected automation would be helpful.