Turn the auto-numbering off. Number the verses with the lyrics > 1.(hardspace)first lyric

How do you mean “blank line”? Can you give us more information?

In our hymnals, blank lines (no text) are inserted after every three verses to make them more readable (hymns with more than 4verses -- see attached).  Is there a way to do this without confusing the verse numbering?

The space between verses 3 & 4 can be found in the lyric tool, adjust baselines. his dialog box you'll find ways to just adjust the vertical offset In a single system or the whole piece.

Verses 1 thru 3 should all have the same offset. Verse 4 should have a larger offset to separate verse 3 from 4. Verses 5 & 6 should have the same offset as verses 1 thru 3.

We could also print verses 4 and greater below the staves; is this possible?

Enter them in text frames at the end of the piece. You can do them stacked, or next to each other; your choice.