Thank you for your questions.
"Is this possible to update the base url and data-driven url in a single step?
It is possible to change the base url through code inside of a script step
by using the line:
In addition to this you would need to follow a similar solution to the coded sample here
to write into your data source and edit/add/remove data driven urls as needed.
"Is there also a way to use local data source to drive the navigate steps? It appears the only option is for an external binding file (csv, xml, etc.)
There is currently an option to bind the NavigateUrl property of a navigate step using local data, I hope the attached image will help you do so. Could you also confirm the version of Test Studio you are using?
Let me know whether my suggestions help.