Lugging is anytime you add fuel (pedal) and the engine cannot increase speed. Regardless of RPM, load, or conditions, that is the ONLY definition of lugging the engine. You can lug the engine at 2500 RPM, just the same as 1000 RPM.
As for the transmission, as long as you do not use a lot of power at low RPM the transmission will be fine. If you use the torque available to you at low RPM you can damage the transmission. How fast and how bad you damage it depends on how much power you have. I do a lot of driving at 1100-1500 RPM locked in OD. Trans has 110K miles on it now, and has had way more power put to it then it is supposed to be able to handle.
Keep the boost down and accelerate gently at low RPM and you will be fine. If you are going to nail it unlock and let the RPM come up, then hammer the crap out of it if you want.