Don't worry, it's not anything out of the ordinary. A number of survivors told some very tall tales after the sinking.
For example, I think it was Edith Russell (?) who claimed that she was able to see people walking along the decks of "the other ship". Sure .......
Some survivors told fantasy stories to their families that they still cling on to till this very day.
To give you one example, I remember seeing a grandson of George Symons' (who was in command of Boat No. 1 with your relative Albert Horswill at one of the oars) interviewed on a BBC program about nine or ten years ago. He related how his grandfather had been "chief bos'un of the Titanic", had been "ordered by
Captain Smith to take charge of the last lifeboat" and had "pulled many people from the water". Not one word of that is true, but evidently Symons had spun this story to his family who never questioned it. And to cap it all, the family were angry that Symons never received a medal !
We had the internet by then so I found out all about the "millionaire"s boat" and the Duff Gordons. I always wondered about 12 on a lifeboat that could hold 40 but I believe the 5 dollars(pounds) paid to the crew on boat 1 was merely a kind gesture by Cosmo Duff Gordon to compensate the men for lost wages, as their pay was stopped by White Star Line the moment the ship went under. They were vilified in the media and it followed all of them negatively for the rest of their lives. We are in the Chicago area, he settled in Gary,Indiana and worked several factory jobs, I dont believe he ever sailed again.
Regarding Boat No. 1, with the clock ticking, First Officer Murdoch and Fifth Officer Lowe probably wanted to clear away No. 1 so that later on the crew could get
Collapsible C away (which they did) and then
Collapsible A away (which they didn't) on the same davits.
It really doesn't seem as though there were any other passengers around that part of the deck at the time No. 1 was launched, or if there were then they didn't want to go. And with other boats to be got away on busier parts of the boat deck, one thing the crew couldn't afford to do was to hang about waiting for people to appear at No. 1. Murdoch and Lowe also knew they and the seamen at the davits, were needed elsewhere. It's possible that as he decided to lower it with only twelve aboard, Murdoch might have hoped that No. 1 would play it's part rescuing people from the water later, alas as we know it didn't work out that way. It's worth noting that the other cutter (on the port side) No. 2 only had seventeen people in it when it was lowered away late on.
You are right that there was nothing murky about Sir Cosmo Duff-Gordon's "gift". The vast majority of historians of the disaster have never seen anything malicious about his £5 cheques given to the boats crew to replace their gear that had just went to the bottom. It was well meaning charity but which naturally under the circumstances just seemed very tactless. The newspapers of 1912 demanded there be villains and scapegoats. The Duff-Gordons were just what they were looking for..
Do you know if your ancestor ever cashed his £5 cheque or was he advised not to ? £5 in 1912 would today be worth £578.69. If it had been me, then I would have certainly cashed it !