After you have dealt with Ursula, Thaddeus appears and afterwards walks up to the second floor. But you don't need him anymore after that!

So if you had the five clues the story can progress without a problem. Thaddeus can tell the story about the Wizard Wars again, but he is not needed for further quests.

I am in blood
Stepp'd in so far, that, should I wade no more,
Returning were as tedious as go o'er.