Answer by Brian for recognize bash variable inside a text file

One option is to use sed to edit the files. This lets you limit what variables get filled in.

This will fill in template.txt and output it to filled.txt:

sed -e "s/\$HOSTNAME/$HOSTNAME/" -e "s/\$USER/$USER/" template.txt > filled.txt

template.txt:

server name: $HOSTNAMEcurrent user: $USER

filled.txt:

server name: ubuntu-servercurrent user: leafar