Top post. I enjoyed reading it. Well thought out.
The origin of the dragon myth is probably not susceptible to proof. We can speculate based on historical records and by comparison to how modern myths develop (e.g. Slender Man), and by applying what we observe in the behaviour of people around us, but we can never know.
My gut feeling is that if fossilised skulls or other bones contributed to the dragon myth, it was as confirmation and reinforcement of an existing myth, rather than as the starting point.
I can imagine someone finding fossil remains and thinking, "Crikey, that's a dragon!" Once they had done so, the evidence of the fossils might feed into the development of the dragon myth.
I find it harder to imagine someone in ancient times finding fossil remains and setting out to explain them from scratch and coming up with the dragon.
Two common things in the human imagination: exaggeration and combination:
- Exaggeration: a 5 foot snake becomes a 10 foot snake as the story develops. The snake bites a child but this becomes "it ate a child." This is exaggerated to, "It ate children," then later, "It ate people." Then, if it was big enough to eat people, it must have been 20 feet long... and a 20 foot long serpent could "eat a whole village" — and so on.
- Combination: When you've heard about the 20 foot snake enough times, it becomes just a 20 foot snake. But add horns, or wings, or a poisonous sting... or had the head of a goat and the claws of a lion, etc.
We can see both these phenomena in popular science fiction, fantasy and the like.
- Exaggeration: King Kong is an ape, but a very big ape. Lovecraft's Old Ones built on a massive scale. Megalodon is somehow asssumed to be scarier than the Great White in Jaws because it is bigger. (Once a shark is big enough to eat you, frankly, further increases in size are irrelevant!)
- Combination: science fiction is full of lizard men, insect men, cat people and so on. In superhero comics, you get the man with the powers of a spider; the man with the power to control fire; the man who bases his costume on a bat, or on an octopus.
When trying to come up with amazing or frightening stories, the human race's standard techniques are "make it bigger" and "combine features from various sources."
This is a far simpler explanation.
I'm with Pete Byrdie that the interest in dragon myths is the folkloric approach of finding the similarities and connections between the stories, rather than the reductionist approach of seeking a concrete basis for key aspects of the stories.