Newsweek and the Wagon Free Story Behind the Mustang.

In April 1964 Newsweek ran a cover story about Ford's development of the Mustang under Lee Iacocca. At a starting price of $2,368, the article was optimistic about the Mustang's future.

For the price of an unglamorous compact, the aspiring young sport can drive out in a reasonable facsimile of a European rally car. And if he wants to, the young sport can add enough items from the Mustang's 50 optional accessories to build himself a real rally car--at a cost ranging up to $4,400. From a mixed bag of engines, transmissions, and special equipment, a true performance buff can put together a car that will peel off 555 feet in ten seconds from a standing start

The article portrays Iacocca's determination to make the Mustang an affordable sporting machine:

He said to the engineers, "Start putting in the extras. Put in class for the mass. If we're right, this will make the Model A look like nothing."

Iacocca obviously meant "the masses", but he clearly preferred poetry over grammar.
The article talks about the development of the Mustang's body, with no mention of Iacocca or the designers considering a Mustang station wagon at this time:

A choice of six or eight cylinder engines had to be offered; to accommodate the long six, the hood was stretched out and the trunk compartment shrunk--a trend which delights Iacocca and styling vice-president Gene Bordinat. "There's something about a long hood that says, 'There's a lot of engine here'," Bordinat gloats. "I wanted a mouthy front end", Iacocca says. "All the $25,000 cars I'd seen at Torino (Italy, in an auto show) had that pointed, mouthy appearance. "The stylists liked the idea, but as Bordinat says, "It took a lot of noodling."

The process of choosing the name Mustang is truly from another era compared to today's world of Google, focus groups, and test-marketing:

"I liked T-bird II," Henry Ford recalls with a touch of petulance, "but nobody else seemed to." Iacocca had no strong preferences, and at this point John Conley, account representative in charge of J. Walter Thompson's forward planning group, was sent to the Detroit Public Library. Conley had spent hours there previously, culling names of birds for the cars that became the Falcon and the Thunderbird; this time, he was looking for horses. He produced a list of 6,000 names (among them: Colt, Bronco), and Mustang was eventually picked. The main reasons, according to Thompson's Frank Thomas, were that "It had the excitement of the wide open spaces, and it was American as all hell."

Given J. Walter Thompson's strong involvement in creating the brand image of the Mustang at this time, one wonders how much Barney Clark, a Vice President at the agency, and stylist Bob Cumberford might have argued for the creation of a station wagon model during the initial styling phase. They shipped a Mustang hardtop to Italy as early as March 1965 (less than a year after the Newsweek article) to be transformed into a station wagon, so their concept and styling for the wagon likely had been developing for some time.