This movie, and Howard Ashman’s work on The Little Mermaid, had a huge impact on this little gay boy as well. I love this analysis, and appreciate your noting the racial issues. (I also think the Motown Girl greek chorus- and their trying to empower Audrey- would be a huge part of a racial analysis.)
The only thing I would add is the centrality of Skid Row (Downtown) to a gay analysis, especially in the way it contrasts with Somewhere That’s Green (SWG). While the song itself is about poverty, substance abuse, and the general injustice the less powerful receive in society, there is also an undeniable vitality to it. It is honest where SWG deceives itself, vital and lusty where SWG is thin and frail, and democratic where SWG is the voice of one person. As an adult and gay man, I now think it’s partially a love note to the gritty gay life of the late 70's/early 80's, and partially a way of endorsing the “I’d move heaven and hell to get out” over SWG’s empty dreaming.
I don’t think you need social analysis to understand why studio execs insisted on the happy ending. However, if Audrey is a metaphor for queer sexual desire instead of AIDS, then in the original ending Seymour is a martyr to gay liberation, and those clipping represent young men being awakened to their true natures. Given the impact this work had on both of us as children, there’s a pleasant symmetry to that.