Is it possible to use open seat pre-requisites for a tournament, so that only people meeting the pre-reqs can be invited (with invite forwarding)?

nope :)

the tournament takes the pre-reqs your template has. i think it only works on open tournaments though. private tournaments are by definition based on invites.

there was a time in which invite tournament would also enforce te pre-reqs. Im not sure how it is nowadays

Funny enough, MoD just posted a private tournament with pre-reqs. Did he do it with pre-reqs defined in the template? See https://www.warlight.net/MultiPlayer/Tournament?ID=16559

I created a tournament a while ago and tried to do a description that was different than what was on the template, but it used the template description. It also used the pre-reqs from my template.

I just tried it by making a new template from the original with the pre-reqs I wanted, and then made the tournament from that. It worked just as I was hoping: https://www.warlight.net/MultiPlayer/Tournament?ID=16560

The only real pre-reqs on a tournament is level 3 (5 on Kongregate) and an invite.

Are you saying that the tournament engine doesn't honour the pre-reqs in the template? That would suck.