It turns out that, not only does the license file have to be in the "lic" subfolder, but it has to be named "license.dat" for "Verify MBD Toolbox License" to find it. I had bangled "S32K1xx" into the filename, since I have more than one NXP license. That was well intentioned but caused activation to fail.
It would be nice if the "Activate NXP MBD Toolbox" function re-named the file appropriately as "license.dat" before copying it to the "lic" subfolder for us, or warn us we need to do that. Only after hours of frustration and answers from this thread did I figure out what was wrong.
Thanks