@madlybusymumoffour - DD did a residential skills course last year at Easter and then got asked to do a (non-residential) new musical workshop (called Windsong) in the summer. I can only assume they had someone drop out of Windsong and thought she was either a near miss at the original audition or impressed on the skills course, as she didn't get invited to a casting workshop, which is the usual way they are cast in a NMW or show.
Going on her experience (which so far has only been those two things), the skills course and the NMW were totally different. The skills course was more like being taught in acting, singing and dancing - it was what I imagine being like performing arts school might be like (although she's at a regular school so I don't really know!).
The NMW was about testing out a specific new musical, and the one she did was heavily about dance and movement, so there was a strong focus on choreography. There was the author /composer of the musical there, two choreographers and I think maybe a musical director as there was a bit of singing involved too. The sessions were about trying out different scenes from the musical to see how they could work, partly for the benefit of the author /composer. So it was really different to the skills course.
From this and previous similar threads I don't think it's the case that DC tend to go in a progression from skills course to NMW to full show - eg there seem to be DC on here who audition for the first time ever and get a show, then don't get a show the next year. Plus all kinds of other combinations.
I think getting a NMW or a show demonstrates that your DC did impress at audition because after the initial audition you (usually) get a call back to a casting workshop either for one (or several) of the shows OR for a NMW. Everyone else gets offered a skills workshop.