Then, if I renamed my templates to say A B C as starting letter they would come in that order?

No, the order is database record ID.that means, first created will come first.

If you want two templates, and want your new template to come as default.

do one thing, copy the existing one. and edit the old one as you like.

I understand and did as you said. Worked!

Just a thought in regards to this:

Does odoo apply the same logic when sending the "automatic" order confirmation when customer puts webshop order in frontend? Does it also take the sale order mail template with the lowest Database ID?

Yes