If you compare what he was actually doing in the 1930's with what he was doing in the 1960's (there's a good comparison here), there was actually....very little change. The changes you're thinking about were primarily introduced by Kisshomaru Ueshiba and Koichi Tohei in Tokyo after the war (see “Is O-Sensei Really the Father of Modern Aikido?”).
You might also be interested in "The Ueshiba Legacy, by Mark Murray", a further discussion of the changes that occurred between Morihei and Kisshomaru Ueshiba.
Yes, and there is some other good evidence, presented by Stanley Pranin that Kisshomaru Ueshiba was not a particularly talented Aikidoka, and certainly nowhere near being on the level of martial prowess as his father. Now, we know that Aikido was tempered after the war, but the question is whether it was tempered out of necessity because Kisshomaru was not as good as his father? Or, was it tempered because of the general ban in post-war Japan on all things budo?
I read something not long ago that after the war, O'Sensei basically retired to Iwama and rarely, if ever came to Hombu, and in addition, he was quite vocal and critical of his son's teaching at Hombu, to the point where, he was actually encouraged to stay away. I have no idea how true/not true that is.