If the assets of a defined benefit plan exceed the liabilities, can one freeze the plan and take the excess as seed capital for an ESOP ?

The DB plan must be terminated in accordance with Title IV of ERISA in order to recapture the excess assets. IRC Section 4980(d)(2)(B) would apply to the transfer of 25% of the excess assets to the ESOP

Correct. But be careful about the 25%. Notice the word "equal" in IRC 4980(d)(2)(B)(i). This is different from the "not less than 20%" in (d)(3)(A)(i).

Is it essential to "Terminate" the DB plan? Can't one just "freeze" it to start an ESOP?

The DB plan must be terminated. See ERISA Section 403© & (d) and IRC Section 401(a)(2).

Can these excess assets from the DB plan be used in the ESOP for debt service?

Maybe