I thank that's a reasonable analysis.
Regarding the EU - I think they will be more generous towards the UK (or at least more patient) than is generally assumed, perhaps more than we deserve. From their perspective, they will want to waste as little time, money and energy on Brexit as possible, and this is achieved by the UK transferring to one of the trading relationships that already exists (e.g., Norway, Switzerland, etc). They will want to avoid creating a completely new trading model just for us - and this includes No Deal, since no-one who currently does as much trade with the union does so on WTO terms. The UK government knows this, which is why they feel that keeping No Deal on the table helps us get a better deal. Unfortunately, the EU27, whose GDP is 5x that of the UKs, knows that the latter will ultimately come out worse from such a scenario. So if there's a realistic prospect of moving towards a Customs Union solution, I think the EU would be minded to allow it.
However, that does leave the very relevant question of how it would be achieved in practice. The first step would be a majority for this option in an IV on Monday. Then the country will need a new management to deliver it. Problem is that most contenders for replacing May are likely to be further to the right than May and less likely to be inclined towards a pro-European view. A point that is often missed about a VonC is that it doesn't guarantee an election: there is a 14-day period for the house to approve a different government formed out of the same stock of MPs. We could end up in a bizarre situation where the house votes in favour of a different Brexit plan, but then also votes in favour of a PM who is opposed to it.
The easiest thing to pass, I think, would be a 2nd ref amendment. I've not yet seen any discussion of whether today's motion is amendable - I suppose it must be. This could be an opportunity to slip in a 2nd ref amendment - but this could be risky as there wasn't quite enough support for it on Wednesday for it to pass. Better strategically I think to simply oppose the vote today, hold the IVs on Monday, and then worry about how to get any majorities translated into action.
Hopefully on Monday the confusing array of options will be whittled down to a small and understandable number. Personally I think all the Soft Brexit people should club together with a single cross-party CU-based option (or maybe two, so the relative merits can be debated) to try and take some of the party politics out of it. But we will see.