The last item selected is user controlled and I wouldn't consider hidden. The first item selected would also do. Visio uses that, although I prefer the Corel style last item selected as you can do all the selections first before picking the key object. Doing it first means that sometimes you end up having to restart the selection. Another choice would be to let the user pick from the screen after the dialog is opened, but I think that is awkward.

The trouble with using the "back" object, is that you have to push the item to the back first (which may well hide it), and then do the align. Whatever method is used, the user should be able to select the key object irrespective of its z-order - or colour, size, shape or anything else ...

The currently typically difficult alignment is trying to centre large objects on small objects, e.g. a ring around a circle. A workaround is to clone the small object, shift-stretch it to keep it centred and make it overlarge, put the other objects within its bounds then centre to selection and delete the dummy object.