Andrew, if look at the code for how the course template is used it just copies the settings. It doesn't copy the template course's activities/blocks (aka content).
I changed your ticket to be a new feature and reworded the title. We have a similar need and would be nice if core supported the idea of a real template course. Though you can do it right now as a plugin and using the backup/restore feature of Moodle and responding to the course_created event.