Is this possible and what tools would you use to do something like this?
No, that’s not possible. The clothes will have completely different meshes to V4,so you can’t apply the morph deltas from the V4 vertices to the clothing’s vertices as the vertices don’t correspond.
I’m presuming yuou tried the Morph Exchange utility from kuroyumes-developmentzone, as you mentioned reading the cr2 spec at that site.
Dimension3D has a pmd binary moph tool in a pack of tools, and his Poser Editor also contains a function to extract pmd morphs and embed them as regular morphs in the cr2 of figures they apply to. He sells these products at Renderosity and Content Paradise, and you can read descriptions and the manuals at his own site http://d3d.sesseler.de/
However, there are also utilities for creating morphs in clothes to match the morpsh in the figure wearing them. The utilities use a brute force mathematical method of aomething like what you described - for the vertices of the clothing, checking the morph deltas of the nearest vertices of the wearing figure, averaging them and then morphing the clothing vertices by that amount.
First, understand that all of the automatic clothing morph products never produce morphs as good as a carefully hand made one by the creator. Depending on the particular morph, the base figure and the clothing mesh the results can be really very good, OK only for a background figure, or terrible. Some of the methods allow features like defining some parts (like zips, buttons etc) not to be distorted, some don’t, and some put in extra adjsutment morphs.
Main products would be:
Morphing Clothes by Dimensions3D
Also a subsidiary function within Wardrobe Wizzard that comes with Poser. Older version from PhilC also works as a standalone program of use to DS-only users.
(By ‘Subsidiary function’ I mean this program’s primary purpose is to convert clothing from one figure to another, but it will also create and add morphs to the clothing from morphs in the figure.)
However, for adding morphs to clothes for V4, personally I found I generally got the best results using magent sets for those morphs, wherein you apply the magnet set for the morph to the clothing, but can then adjust the magnets a bit to get the best fit and then spawn the morph in the clothing. I’m pretty sure there’s at least one if not two sets of magnets for putting GND4 morph into V4 clothes. the usual suspects for that are Lyrra and Netherworks. I’ll see if I can find links, but may be awhile ... got to take a pain break.