Hello Bigleagueslider.
You write:
"Indeed, the variations in lift produced by each of the CH-47s tandem rotor blades during a single rotation is greatly affected by downwash flows, wake turbulence from the preceding blade when the F/R blades intermesh, changes as each blade transitions between advance and retreat, and the structural twist, flap and lead/lag deflections in each blade due to response to aerodynamic and inertia forces."
Worth to mention:
Several of these problems cannot be solved.
For instance, it is impossible to control the pitch of the blade that passes over the fuselage.
However, the Chinook CH-47 is one of the most successful "Flying Machines", ever.
You also write:
"All modern rotorcraft use continuous active pitch control of the main and tail blades during all regimes of flight to control the collective and cyclic roll/pitch/yaw forces produced by the rotor systems."
The PatATi Portable Flyer looks like a scale-down of the Osprey (Bell Boeing V22):
Unless I am wrong, the Osprey V22 needs not "continuous active pitch control" of its rotors. It is based on a completely different approach: it is an airplane capable to take-off and land vertically: all it takes is to turn upwards its two large counter-rotating propellers.
You also write:
"Since your rotor blades have fixed pitch you have no way to control their combined cyclic force, and you can only control their collective force by using the throttle to change speed. Using the engine throttle to control hover flight is not an easy thing to do due to the slow response in lift provided by throttling the engine. All rotorcraft avoid this problem by operating the rotor at a constant speed and using pitch control of the blades to vary collective and cyclic lift forces. This approach provides a much higher rate control response."
While the "variable pitch blades" is an option for the PatATi Portable Flyer
(not for the reasons you write, but for the sake of auto-rotation: the propellers – that can be disengaged from the engine – accumulate energy – like flywheels – and deliver it controllably according the selected pitch),
the fixed wing blades have several advantages like: simplicity, robustness, lightweight, reliability, low-cost etc.
The slower response when the throttle controls the thrust is OK.
Look at Martin’s Jet Pack:

(several millions have been invested so far; and unless I am wrong, they are looking for another 24) wherein the throttle controls the thrust.
In the Martin JetPack case, the pilot is just another mass tightly secured to the casing, with the electronics doing the control.
What happens if – for some reason – the propellers of the Martin Jet Pack (empty weight 180Kp / 396lb according wikipedia) provide a thrust of only 80% of its total weigh? Nothing. It remains on the ground.
And what happens if the propellers of the PatATi Portable Flyer provide only 80Kp (176lb) thrust? The pilot feels like weighing only 20Kp (44lb), so he can jump several meters in height and then land on his feet safely, he can run “like the wind”, he can climb on mountains etc, etc.
In the PatATi Portable Flyer the pilot / rider has the main active role.
He uses his legs, hands and body for the control of the flight.
He uses his legs / feet for the landing, he also gives with them the final push at take-off.
Just like the bird, the bats and the bugs.
The PatATi Portable Flyer is completely different than a small helicopter.
Look at it as a scaled-down Osprey V22 wherein the pilot – rider is the casing and the wings and the control and the landing system.
Thanks
Manolis Pattakos