glad to hear that you like the new excel writer / sheet appender :).
The advantage of this flow variable is that it does not only control for the location, but also the selected file system, i.e., when open the dialog you also see at the top the write to drop down. A String flow variable cannot control for this. If you, e.g., use the Create File/Folder variable node and in the beginning you write relative to -> workflow data area and at some point you decide to write to your Local FS all you have to do is adapt this node, but none of the nodes downstream. A String flow variable would not be sufficient.
Regarding how to create these variables from a string or get a string flow variable from a path you can use the String to Path (Variable) or Path to String (Variable) nodes.
Best
Mark