I did not need the host file change.
Outside the container I can test using:
aws –endpoint-url=http://localhost:4566 s3 ls s3://my-bucket

Within ddev containers, LocalStack service is referenced as localstack, so endpoint is http://localstack:4566 (e.g. .env).

I don’t typically ssh into the container to execute commands. Instead I use ddev exec…
ddev -s localstack exec awslocal s3api create-bucket –bucket sample-bucket
I created convenience/wrapper commands for awslocal and s3api).

I also found it useful to use init scripts (https://docs.localstack.cloud/aws/capabilities/config/initialization-hooks/#example) for setup.

Thanks again.