Sorry for the typos. I've corrected the code below to be consistent. The error message was, and is (I am anonymizing the directory details):
[Fri Sep 28 15:15:39.301689 2018] [autoindex:error] [pid 17591] [client 126.96.36.199:45731] AH01276: Cannot serve directory /home/data/site1/htdocs/: No matching DirectoryIndex (index.html,index.html.var) found, and server-generated directory index forbidden by Options directive
Anywhere I put the DirectoryIndex line in the vhosts.conf file it results in apache downloading the html of the index page but not displaying it. So I've commented it out at present.
Please explain what you mean by 'vhost context'. I am unfamiliar with the FallbackResource directive.
Thanks for our help; I'm still head scratching here.
# DirectoryIndex index.php