yes, the new timer passive allows for permanent transformation in PvE.
On PTS Werewolf is currently viable for PvE although not optimal for AoE heavy fights.

Can still change before the update, many think it actually does too much single-target damage for how simple the rotation is (basically just spamming light attacks).

My bet is that ZoS will ship it as is, we'll see a few weeks/months of "Werewolf FotM", then it will be nerfed slightly and everything will go back to 1% of active werewolf players. (instead of 0,5% now)

Werewolves are currently able to complete vet dungeons. I say this as someone who's beaten vet Bloodroot and vet Fang lair (among others) with a werewolf character.

The new changes look like a mixed bag on paper, but we've been hearing (and seeing) some good things from people on the playtest server, so ymmv. If nothing else, the new feeding mechanics and the ability to res and use synergies while in werewolf form should be a big improvement.