] A few weeks ago Shinjinee mentioned a theory by an Australian academic that S&S is a thinly-disguised retelling of Warren Hastings' possible relationship with Philadephia Hancock, JA's aunt.

This is really interesting! I missed the original post. Perhaps it would be more truthful to say that Jane was doing what all novelists do - adapting elements of things around her for use in her novels. As we know, she often used real family names for her characters: Wentworth, Fitzwilliam, etc.

I noticed the Willoughby name in her family line only last week. I doubt it was significant in S&S, she probably thought it 'felt right'.

I don't think Jane Austen deliberately ignored unpleasant things, she just wrote about what interested her and what she knew. She declined to write about (IIRC) the Prince Regent's German ancestors for that reason.