Just as I was about to shelve this project, the latest RPi update provided hardware video processing via an update for vlc.
It’s far from perfect, but infinitely better than before, and more-than good enough to investigate more. In particular, currently the connection between camera and player are joined via a home WiFi with router and extender with perhaps 10 other computers with the kids running videos! Next step is to move onto Penelope’s private network and see if that’s better.
P.S. Just run with Penelope (WAP host), Percy (VLC video player) and Pat (RPi video recorder). It’s better, but the video still stalls every few seconds. Not sure yet whether this is due to the network connectivity or VLC itself.