You didn’t answer my question:
Making Hugo, Obsidian, and VS Code place nicely together is simple.
Vault structure:

Obsidian vault settings (app.json):
{
"attachmentFolderPath": "attachments",
"newFileFolderPath": "content",
"newFileLocation": "folder",
"newLinkFormat": "relative",
"showFrontmatter": true,
"useMarkdownLinks": true
}
Hugo configuration:
[[module.mounts]]
source = 'static'
target = 'static'
[[module.mounts]]
source = 'attachments'
target = 'static/attachments'
Try it:
git clone --single-branch -b hugo-forum-topic-43912 https://github.com/jmooring/hugo-testing hugo-forum-topic-43912
cd hugo-forum-topic-43912
hugo server