I decided to run some tests and have figured out why this only happens in my car and how to stop this happneing via a short term fix.
I found that turning off the WIFI (via the settings menu option) that the issue stops.
During the test, I switched off the WIFI on my phone (via the settings menu) and went for a spin in my car.
Hey presto, the issue has now gone :-).
This explains a lot, as when sat on my drive listening to music (with my WIFI switched on and still connected to my home WIFI) all was good, when the I started to drive the car the issue started to happen, so maybe this is linked to the WIFI connectivity status or when the phone is searching for a WIFI connection?
This also explains why this only happened in my car and not on my Bluetooth headsets, as I always use them at home or in flight mode.
Hopefully with all of this information, Apple should be able to diagnose the issue.
I already have a ticket open with Apple and will update them on these findings.
I would suggest everyone still reports to this Apple as this may add some weight behind a long term fix turnaround.
We should stipulate so there's no confusion that there are two issues both concerning Bluetooth and iOS 12 that may otherwise be separate: One has to do with connectivity; and the other has to do with distorted playback. Everyone might want to be clear in these postings which they're talking about. Thanks.
Many thanks. As I may have mentioned elsewhere, I "resolved" my problem by downgrading back to 11.4, but I'm not sure I'll that that option again if I plunge back into 12 (or, now, 12.0.1) and still have the distortion. So I'd like to be as sure as possible before I make the upgrade again -- which both my iPhone (7+) and laptop are eager to do.