I know this article is old, and I only came across it, because I started to get interested in the translation of "The Neverending Story", as I grew up with the german original. While I appreciate many of your insights, I think you missed one major point in your discussion:

The question of the Outer World/Fantastica and their relation. As Gmork tells Atreju - beings from Fantastica that enter the human world through the Nothing become lies, defaced and abused. And by making their children believe there is no such thing as Fantastica, humans unwittingly increase the stream of lies loosened upon their world. On the other hand, only a human child can heal the Childlike Empress and restore the balance.

Ultimately this is about OUR inner and outer world, the world we live in and the world of our mind. In the beginning Bastian runs away from his life, because he is bullied and lonely, inside Fantastica he can be all that he wants to be... and there he learns that neither beauty, nor courage, nor fame can give him what he truly wants. The love of his friends, of his father. This is the point it all center's around. Through this journey Bastian comes to understand himself and when he comes home in the end, he is willing to tackle his problems. He talks to his father, he is willing to go and set things right with Mr. Coreander himself... and I am pretty sure he will stand up to the schoolyard bullies before long.

And here we come to what Mr. Coreander says in the end: that those who go to Fantastica and come back, make both worlds whole. And here we are at our own imagination, our own dreams. If we loose ourselves to our imagination, then we might as well sit in the Old Emperor's city... but if we grow to understand ourselves better through our imagination... then we'll be stronger for it.

Upon publishing "Die unendliche Geschichte" received a lot of bad critisism from left-wing literature critics, because the story did not deal with real-world topics, nor with social topics or other 'progressive' themes. Which brings us back to the people who'd prefer that men had no dreams, because people without dreams are much easier to control.