The basic flaw in what you're suggesting (that the war could have been averted by mollifying Putin on the terms of his stated narrative), is that, as we both seem to agree, the stated narrative was never the real basis for his decision to invade.
Putin's actual reasons, in turn, seem to have been primarily about:
1. Securing the 3 currently (as of Feb 2022) occupied regions, especially the Crimea, for permanent annexation. Russia's position in the Crimea in particular was at the time severely compromised, due to Ukraine's shutting off of its water access. It also "needed" a land bridge (around the Azov) in order to be reasonably secure in the long term. (We put "needed" in quotes here to remind ourselves that this was the regime's internal desire, not any kind of objective or real "need"). As gravy, or as a way of offsetting the cost for the whole operation, there was also the matter of the Donbas region's significant lithium reserves (estimated at $3T).
2. Permanent deterrence of any NATO bid on Ukraine's part, likely involving some form of formal declaration of permanent neutrality (Finlandization).
3. As gravy, anything it could have also won in terms of regime change in Kyiv, preventing whatever rump state (if any) that remained in Western Ukraine from joining the EU, or simply damaging its chances for success and prosperity generally ("wrecking it", in Mearsheimer's words) would have been a very signicant plus.
The thing is, (2) by itself could have been had without resorting to a full-scale invasion. The West was eager for some kind of deal to end the 2014-2022 conflict, and having Ukraine in NATO was always optional, as far as it was concerned.
But the price for Putin -- forgoing his paramount desire for (1) -- would have been far too high. Plus he thinks of himself as a visionary leader, destined to make his mark on history, and for many years had deluded himself as to Russia's actual capabilities for military adventures of this sort.
So that's why he went "whole hog" in Feb of 2022. The main point here is that there doesn't seem to be much logic in thinking the war could have been avoided by addressing the stated narrative. When Putin's real reasons for invading, with emphasis on (1) above, would be in no way addressed by tactical appeasement of this sort.
> he thinks of himself as a visionary leader, destined to make his mark on history
Well put. This seems to get glossed over. Putin doesn't have too many years left in good health and won't go quietly on gardening leave.
I agree with you and would also add that even if the NATO expansion argument is merely a facade, it's not the only one he has to play with.
OP mentioned protecting ethnic Russians in Donbas. Putin's narrative to Russians in fact goes much further than that: he portrays himself as reconquering and unifying the traditional Russian state. Let's not forget the speech he gave shortly after the invasion, in which he described Ukraine as an illegitimate state on Russian soil.
The other narrative he pushes is about neo-Nazis taking control of Ukraine. Iirc one of the aims of the "special operation" is to remove Nazis from the Ukrainian government. Which is obvious bollocks to us in the West, given that Zelensky himself is Jewish. But in Russia the war is successfully portrayed as a sort of rehash of WW2: soviets vs Nazis.
I think in the postmortem we will figure out that this was about #2 moreso than anything else. He wanted NATO off his doorstep but NATO kept encroaching since he did nothing every time they encroached. This is somewhat the act of a madman, but it's a response to NATO continually breaking promises.
The land bridge to Crimea is nice, too, don't get me wrong.