I understand. I think your last objection is very valid and perhaps needs far more consideration.

Anyway, I have limited computer access at the moment, but maybe you find the following response I wrote in the meanwhile useful. Ill get back to you.

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Some remarks that hopefully answer your question:

The Memex was specifically designed as a supplement to memory. As Bush explains
in lengthy detail, it is designed to support associative thinking. I think it's
best to compare the Memex not to a writing device, but more to a loom. A user would use a
Memex to weave connections between records, recall findings by interactively following
trails and present them to others. Others understand our conclusions by retracing the
our thought patterns. In some sense, the Memex is a bit like a memory pantograph.

Mathematically, what Bush did is to construct a homomorphism to our brain.
I think it is important to realize that, when we construct machines like the Memex
or try to understand many research efforts behind hypertext. Somewhere in Linda Barnett's
historical review, she mentions that hypertext is an attempt to capture the structure of thought.

What differentiates most word processing from a hypertext processor are the underlying
structures and operations and ultimately, how they are reflected by the user-interface.
The user interfaces and experiences may of course vary greatly in detail, but by
large the augmented (and missing!) core capabilities will be the same. For example,
one can use a word processor to emulate hypertext activities via cut and paste, but
the supporting structure for "loom-like" workflows are missing (meaning bad user-experience),
and there will be a loss of information, because there are no connections, no
explicitely recorded structure, that a user can interactively and instantly retrace (speed and effort matter greatly here!),
since everything has been collapsed to a single body of text. The same goes for annotations,
or side trails that have no structure to be hanged onto and have to be put into margins,
footnotes or various other implicit structural encodings.

Hypertext links, at least how Ted Nelson conceptualizes them, are applicative. They are not
embedded markup elements like in HTML. In Xanadu, a document (also called version) is
a collection of pointers and nothing more. The actual content (text, images) and the documents,
i.e., the pointer collections, are stored in a database, called the docuverse. Each content
is atomic and has a globally unique address. The solution to broken links is a bit radical: Nothing may
be deleted from the global database.
In other Hypertext systems, such as Hyper-G (later called Hyperwave), content may be deleted and link integrity is ensured by a centralized link server.
(If I am not mistaken, the centralized nature of Hyper-G and the resulting scalability problem was its downfall when the Web came).
Today, we have plenty of reliable database technologies and the tools for building reliable
distributed systems are much, much better, so I think that a distributed, scalable version of
Ted Nelson's docuverse scheme can be done, if there is enough interest.

How a document is composed and presented, is entirely up to the viewer. A document is only
a collection of pointers and does not contain any instructions for layouting or presenting,
though one can address this problem by linking to a layouting document. However,
the important point is that processing of documents should be uniform. File formats such as PDF (and HTML!) are the exact opposite of this approach.
I don't think that different formats for multimedia content can be entirely avoided, but when
it comes to the composition of content there should be only one "format" (or at least
very very simple ones).

I hope this answers some of your questions.