I gave up on Studio5 & AVRDragon.
When I finally figured out how to coerce it to compile C++, it refused to program my parts. When I finally got it to program them, it refused to debug them. Once debugwire was enabled, it would program them if I was willing to wait for not one, but two messages "this is taking a really long time, do you want to quit or wait another minute?". Yes, it takes multiple MINUTES to download a hex file. Debugging worked, but there is no way I feel like waiting for 2 minutes to download a hexfile.
What a pile. :x
I reverted back to Studio4. It works fine. It lets me write in C++, it programs, downloads and debugs parts fast.
The only really irritating thing about Studio4 is that once debugwire is enabled, the only way to adjust the fuses is to run the low-level AVRDebug.exe program, as such:
AVRDragon.exe -dATMEGA328 -W
That command temporarily disables the debugwire so you can change the fuses.
You should know that if you try that same command on Studio5, you find out that Studio5 forces you to use a new AVR dragon firmware. Guess what, that new firmware is incompatible with the AVRDragon.exe program to disable debugwire. So: no way to disable debugwire, no way to change fuse settings.
On the plus side, deleting Studio5 gave me back 1.2G of disk space.