The fontSubstitution registry key just replaces all references to one font to the other, you can substitute a non ttf font, but a non ttf wont be able to do all the rotations in word/page apps etc., and may not work in some apps, TTF fonts are much better.
the link you posted lj is how to convert a set of .fnt files generated by resource workshop, a tool for generating fonts etc, into a .fon file, using an assembler, not C++, tasm or masm or nasm should work ok, if you have the right .fnt files, usually theres one for each size and style and you need an .rc file with the right info to create it, its a royal pain, and better to use one of the many font creation programs.
as for converting a fon to a ttf, its probably never going to look as good as a native ttf, the info just isn't there to do a great conversion.
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