So I just did some reorganization that pretty much invalidated that old structure. In particular, I have moved everything that needs to be deployed into ~/src/project/web. However, I want it to be accessible via http://localhost/me/project. I tried physically moving the project back into ~/src, and then making a symlink to the subdirectory, but that didn't work. Apache would still produce 403s for all the relevant files. So I had to roll up my sleeves and dive into Apache configuration.
Before I go further, I'm compelled to pull out the old soapbox. I have painfully little experience with Apache - I have never had to configure or support it in a production environment, and that makes me happy. From this position of ignorance, I have decided that Apache is a dinosaur that should have died a long time ago. For example, instead of configuring the server from the request's point of view (as has been popularized by Rails' routing logic), it is configured from the filesystem's point of view. The default Mac OS configuration has, buried somewhere in the middle of the file, a directive that disallows the serving of all files under /. Because, I guess, they would be served by default if that directive wasn't present? But still, nobody seems to want to spend the time to produce a replacement web server, and so we struggle on. </rant>
The default Apache install on MacOS 10.7 uses a split apache configuration file. The bulk of the configuration is in /etc/apache2/httpd.conf. However, each user also gets their own /etc/apache2/users/me.conf, which are all imported into the main configuration. And while the main configuration file specifies the FollowSymlinks option, I discovered that the same is not true in my personal config file. All I had to do was to add the FollowSymlinks option to that configuration file, restart Apache, and everything started working.
So if you have only basic web serving needs, the default config should suffice. If, however, you want/need to spread the files around your disk, you need to mess with the Apache configuration.