Whilst I agree with most of your points, I think the fact he got a cameo last season shows that the club think highly of him and everyone connected with the club has spoken highly of him.
Also the choosing Dortmund as he'll get game time argument falls down when you see that he is behind Sancho in the England U17s and he isn't getting any game time himself.
What I think may be harming us is that a lot of the players he played with last season have moved up to the u23s whereas he is still with the U18s. He probably feels he has shown enough to warrant moving up a level and testing himself more which I can understand and it is a little bit baffling why we haven't allowed that to happen.
I think Dortmund is interesting for every player in a situation like this, because it actually worked for them multiple times. Guys like Götze, Sahin, Pulisic, Dembele, Weigl or Zagadou all made it there or are on the verge of making it. I don't think there is another club right now who can claim such success with youngsters for themselves.
So whenever a player is not sure about his perspective, Dortmund seem to be the best adress. It won't work all the time, as Mor and Merino showed, but even those guys got their chance. If I was a young player, I'd prefer Dortmund over any other club in the world.
Teams like United, City and others like Bayern, Barca or Juve can't rival that kind of record right now. No matter how much they like a young prospect. You always have to be afraid, that the pressure at the club is too big and the young ones will be left out of the team.