Could I use this same method to make dry vermouth by using a clear liquor to fortify (like grappa) and skipping the sugar/caramel step?

Miss Mertz, I do not know this recipe but I do make a botanical drink by infusing pisco (which is basically the same as grappa) with various and assorted herbs from my garden each fall. Once they have steeped I make a simple syrup and add it to the pisco, tasting until I get the desired sweetness - I prefer it much less sweet than the orujo de hierbas finas that you get in Spain. All of that to say I am sure you could adjust the sweetening to your own taste.