We definitely only have pieces of the story. Here's what we know:
They did FAAB in 1994. Contrary to later muddled reports, they did not do a bunch of "digital" work on the song in pre-production. This was done relatively the old-fashioned way, with the band re-recording the song from scratch, and Jeff Lynne literally hitting the "record" button to punch in John's demo. I'm sure they used plenty of EQ and whatnot, but this was all done with outboard gear in the studio. It was even tracked on analog tape.
In late 1994, Jeff Lynne was given the other two John demos, "Now and Then" and "Real Love", and he enlisted the help of engineer Marc Mann, who was adept at using PC-based digital tools in that early era of ProTools and other software, to both clean up the recordings and then also edit the demos so that they were in a "ready to overdub" form for the Beatles. They went so far as to prep temp musical tracks, adding instruments to give the Beatles an idea/guide. I think this indicates that *TIME* was a factor in terms of having the Beatles together to record. Whether because they didn't want to burn out spending months and months together, or because they had other priorities (I recall Ringo left for a friggin' vacation during one of the batch of sessions; clearly he had his priorities set!), they only had a finite amount of time to record. We also know from the epically detailed Good Day Sunsine article that *most* of the prep work time spent during the two weeks in late 1994 by Lynne and Mann was spent on "Now and Then." This appears to have been the prime candidate to work on first during this second batch of reunion sessions. The article goes on to indicate that, with just a few days left, they went ahead and did similar work to "Real Love", almost as if it was an afterthought and they just did it because they had the time. Whether there was a plan for only 2 versus 3 songs at this stage isn't clear.
One of the things the pre-production information indicates is that the story/narrative that "Now and Then" was technically/logistically problematic is at least partially untrue. A lot of people have written that "Now and Then" was going to be a slog because so much work would be involved. This is true up to a point, but we don't know how much so, and I suspect it wouldn't have been such the epic slog and technological challenge that some have painted it as (and I suspect they will paint it as when they promote the new version and "explain" why they didn't finish it in 1995). We'd have to hear the Lynne/Mann temp version to know for sure. But the idea was that Lynne and Mann did *most* of the "arrangement" and editing work ahead of time. They got it into a form where what was needed was overdubbed instruments and vocals, and presumably some new lyrics.
Also, the narrative that the John vocal on "Now and Then" was unworkable in 1995 is clearly not true, as they literally worked on it for several weeks in late 1994.
In short, from a technical standpoint, "Now and Then" absolutely could have been finished in 1995, and John's voice would have sounded more or less on par with what we hear on FAAB and RL. Further, it appears "Now and Then" was the primary focus/goal/priority when they convened in February 1995.
The gap in the story is precisely what George's issue was with "Now and Then." He "went off" the song, and we just don't know what that means (and I tend to doubt we're going to get more of *that* part of the story as they promote the new version!) with any specificity. So I suspect what happened is that George was just kinda grumpy/meh about the entire ball of wax when it came to the song. He probably didn't think the *song* was that great, and he probably saw that, even with weeks of pre-production work having been done for him, he'd have to sit down and write lyrics *again* with Paul as they had done on FAAB, which apparently was a fraught process. If it was an iffy situation for them to write *a few lines* of new lyrics, I can see how staring down "Now and Then" might make George balk.
All the while, keep in mind they're on a ticking clock (ridiculously given they weren't like all touring all year or anything, but that's another discussion). So George is grumbly about "Now and Then", it probably just feels a bit wonky as they try to start laying on some instruments, and George says "meh, let's skip this one and work on the other one." "Real Love" solves all of the problems *in that moment*; they're on a ticking clock and "Real Love" can be done faster, I suspect George liked the song more as it was more melodic and upbeat, probably had more room to do his type of guitar work, John's voice was (arguably) kind of clearer, etc.
So I think having "Real Love" sitting there made shelving "Now and Then" a thousand times easier.
Once the late 1995 momentum for the "Anthology" project had subsided, and everybody had their big pay day, I suspect George had very little reason/motivation to go back to finish "Now and Then." It was a song he probably didn't like that much, he clearly was not super into spending tons of time in the studio with Paul McCartney, and then add in any other number of factors (the mixed reception of the reunion songs, etc.)
Had "Real Love" not been available and "Now and Then" was the only thing to work on, I'm not sure what would have happened. If they had already signed that *hugely* lucrative deal with ABC in the US for them to premiere two new songs, then they would have had to either finish "Now and Then" or figure something else out. I think somebody may have had to prod George to keep working on "Now and Then" had it been the only thing available. But that's difficult to say.
I do think, despite one early interview where Paul tried to not blame George, I think Paul was much more bullish on working on "Now and Then", and had George not said "nay", the song probably would have been finished as either the 2nd or 3rd song back in 1995. In that scenario, would we have not gotten "Real Love?" Probably not, but it's an interesting "what if."
And also, as for "All for Love", I'm pretty certain no such song ever existed. Dhani and Olivia have said it doesn't exist, and no evidence has surfaced to date. I think the one guy who says he heard the title from Paul garbled something, despite his insistence that he didn't; or something got garbled.