How would I package and sell a Django app?
Don't try and obfuscate or encrypt the code - it will never work.
I would suggest selling the Django application "as a service" - either host it for them, or sell them the code and support. Write up a contract that forbids them from redistributing it.
That said, if you were determined to obfuscate the code in some way - you can distribute python applications entirely as .pyc (Python compiled byte-code).. It's how Py2App works.
It will still be re-distributable, but it will be very difficult to edit the files - so you could add some basic licensing stuff, and not have it foiled by a few #s..
As I said, I don't think you'll succeed in anti-piracy via encryption or obfuscation etc.. Depending on your clients, a simple contract, and maybe some really basic checks will go a long much further than some complicated decryption system (And make the experience of using your application better, instead of hopefully not any worse)
Currently I am hosting a Django app I developed myself for my clients, but I am now starting to look at selling it to people for them to host themselves.
My question is this: How can I package up and sell a Django app, while protecting its code from pirating or theft? Distributing a bunch of .py files doesn't sound like a good idea as the people I sell it to too could just make copies of them and pass them on.
I think for the purpose of this problem it would be safe to assume that everyone who buys this would be running the same (LAMP) setup.