Suppose you start with a linear charge density $\lambda^+$ of positive charges and $-\lambda^-$ of negative charges in the wire, everything at rest.
Case 1: No current, test charge stationary
You assume you have a neutral wire with no current. Therefore $\lambda^- = \lambda^+$. There's no other frame worth considering, since nothing is in motion anyway.
Even if you did go into another frame, any change in charge density will affect electrons and nuclei equally. Thus the wire is neutral in all frames, and test charges are entirely unaffected by it.
Case 2: Nonzero current, test charge moving with electrons
Now suppose you have a wire with a current. Again, the wire is neutral in the lab frame $S$, where the bulk of it is not moving. In this frame, we still must have $\lambda_S^- = \lambda_S^+$, even though the electrons are moving and the nuclei aren't.
If we slip into the rest frame $S'$ of the bulk electron motion, then the spacing between electrons must be different, and in fact it must be larger. Since charge doesn't change when changing frames, we know $\lambda_{S'}^- < \lambda_S^-$. Similarly, the nuclei spacing will be length-contracted, so $\lambda_{S'}^+ > \lambda_S^+$. In this frame, then, $\lambda_{S'}^+ > \lambda_{S'}^-$, so the wire looks positively charged, and any (positive) test charge at rest in this frame $S'$ will be repelled.
As you can check, this is exactly what the Lorentz force law tells you. If the electron bulk motion is in the $-z$-direction, then the current is in the $+z$-direction, and the magnetic field along the $+x$-axis (assuming the wire coincides with the $z$-axis) is in the $+y$-direction. A positive charge with velocity in the $-z$-direction in a magnetic field in the $+y$-direction will experience a force in the direction of $(-\hat{z}) \times (+\hat{y}) = +\hat{x}$, away from the wire.
Case 3: Nonzero current, test charge stationary
Now consider the setup as follows. In $S$, the nuclei and test charge are stationary, but the electrons are moving in the $-z$-direction. Just as before, we can transform into the electrons' rest frame, where we will find that the wire is positively charged. However, we also have that the test charge is moving in the $+z$-direction in $S'$, and that there is a current of positive charges in the $+z$-direction (which we could neglect earlier). Here the full Lorentz force law tells us there is a $qE$ repulsion, and also a $q \vec{v} \times \vec{B}$ attraction, and in fact they perfectly balance in this frame, so there is still no net force.
Summary
The space between electrons expands only if you keep yourself in their rest frame as you accelerate them. The spacing measured by an observer who doesn't accelerate is unchanged, in keeping with the assumption that the wire stays neutral in the lab frame. You can only use the electrostatic Coulomb's law if you are in the frame where the test charge of interest is stationary. If you are in a frame where the charge is still moving, you need the full Lorentz law, using whatever electric and magnetic fields are present in that frame.