First of all, when you quote, could you please mention where that quote comes from?
I don't think there's much to your theroy at all. Bio Menace uses the same engine as Keen 4-6 and Dreams, but so do Catacomb 3D, Dangerous Dave 3-4 and Rescue Rover 2. One could argue that Bio Menace is more similar to Dave than it is to Keen (opening doors, hit-scan weapons, blood & guts). The only game mechanics Bio Menace inherited from Keen are the ladders (poles in the Keen games) and the grenades (flower power from Dreams).
Keen as a hostage is just a cameo appearance/easter egg, same as the Apogee room later in BM2. Keen's helmet can also be found in some acid/slime pools in Crytal Caves, the teddy bear from Keen 1 appears in Secret Agent and Dr. Proton mentions Commander Keen in the first episode of Duke Nukem 1. None of that means that any of these games are some kind of resurrection of the Keen franchise. And I won't even begin to discuss Level 32 of Doom II.
The lack of names for the monsters in Bio Menace bugged me, too. At least some of them ("Ants", "Cyborgs" and the bosses) have names that are mentioned in-game.
I think the main difference between v1.0 and v1.1 is that the /LATCHPEL switch was added to fix the jerky scrolling on some graphics cards (I have a machine that requires the /LATCHPEL switch). And the "technical info" screen that shows up every time you start episode 1 was another addition in v1.1. I think the memory check at the start of all v1.1 releases except the shareware release was messed up during the update. Normally, when you don't have enough memory, the program displays the "not enough memory" screen and quits immediately. But here, the program will still start, only to crash with an "out of memory" error later on.
By the way, I think that memory issues are the main reason why Bio Menace was discontinued and eventually released as freeware. It is almost impossible to play this game with music on actual hardware without running into "out of memory" crashes. It's amazing that the game was updated to v1.1, but Norwood didn't fix the main problem that caused the game to run out of memory. Maybe he never noticed it or he didn't know how to fix it. The main problem is that the current song is not removed from memory when a new song is loaded into memory. The game is "leaking memory". And besides that, Norwood and Apogee never seemed to check the memory usage in each level (even though the game engine has the code for that), because the 580k that the game supposedly requires are not enough to play E1L10 with music. E3L4 and E3L8 require even more free memory to start at all, and then the issue with the music can still cause a crash if you're not careful. Even with the music turned off, you can't play these levels of episode 3 with the 580k that are supposedly required to run the game.