(Abridged) The origin of dSphs in the Local Group (LG) remains an enigma. The tidal stirring model posits that late-type, rotationally-supported dwarfs resembling present-day dwarf irregular (dIrr) galaxies can transform into dSphs via interactions with Milky Way-sized hosts. Using collisionless N-body simulations, we investigate for the first time how tidal stirring depends on the dark matter (DM) density distribution in the central stellar region of the progenitor disky dwarf. Specifically, we explore various asymptotic inner slopes gamma of the dwarf DM density profiles (rho propto r^{-gamma} as r -> 0). For a given orbit inside the primary, rotationally-supported dwarfs embedded in DM halos with core-like density distributions (gamma = 0.2) and mild density cusps (gamma = 0.6) demonstrate a substantially enhanced likelihood and efficiency of transformation into dSphs compared to their counterparts with steeper DM density profiles (gamma = 1). Such shallow DM distributions are akin to those of observed dIrrs, highlighting tidal stirring as a plausible model for the LG morphology-density relation. When gamma <1, a single pericentric passage can induce dSph formation and disky dwarfs on low-eccentricity or large-pericenter orbits are able to transform into dSphs; these new results allow the tidal stirring model to explain the existence of virtually all known dSphs across a wide range of distances from their hosts. A subset of rotationally-supported dwarfs with gamma <1 are eventually disrupted by the primary; those that survive as dSphs are generally on orbits that are biased towards lower eccentricities and/or larger pericenters relative to those of typical CDM satellites. The latter could explain the rather peculiar orbits of several classic LG dSphs such as Fornax, Leo I, Tucana, and Cetus.