Re: Comments on parsing steps:

>>From first reading, it appears that the step of "parsing embellishments"
>e.g. superscripts, accents etc needs to happen *before* the operator
>precedence parsing step.
>Also, this will allow us to handle complex expressions appearing as
>embellishments to other complex expressions correctly.

Mathematica's parsing, which works in a manner similar to what Bruce describes,
has no problem handling complex embellishments as in your example.
Perhaps I am too familar with the algorithm and that I filled in pieces
missing in Bruce's description, but I didn't see anything wrong with his
description.  Do you have a (simple) example in mind where it fails?