Yes, I agree, that sounds like a sensible suggestion.

I propose to first update only cookiecutter and to apply this change when each module receive the new documentation structure.

I've just found issue8465, which already removes the toctree using a slice. I propose to change this to a regular expression, so that we do not have to update the setup.py file if the toctrees in the documentation change.

I do like the idea of stripping out the Sphinx syntax out using the read method.

To keep it as simple as possible I think we should limit it to just removing the toctree directive, and then just make sure we don't include any other Sphinx markup in doc/index.rst (enforced by issue9781).

I think it will be confusing for the user to have such track path to read the documentation. One of the goal of using reStructuredText is to be easily readable in the source.
What about having the read method in setup.py to strip Sphinx syntax marks?

The README.rst files are used on PyPI, and they should only contain standard reStructuredText markup and directives. At the moment some of the modules (such as the timesheet module) use the toctree directive in the doc/index.rst file which is used as the README.rst file, although it may seem to work it is not supported.

To fix this we could move the doc/index.rst file to README.rst, and remove any toctree and other Sphinx specific markup from it. Then create a doc/index.rst file that contains for example:

.. include:: ../README.rst

.. toctree::
    :maxdepth: 1

    user_application