My solution isn't ideal, but I found a work-around for the Character Creation screen issue.
As far as I can tell, Character Creation for the main campaign *requires* both player characters to be labeled as IsPlayer.
All of the variations I tried that removed IsPlayer from Player2 failed horribly, so my solution was to leave the Player2 Character file alone and set the character to invisible during Character creation.
I also removed Player2 from the party immediately after Character creation, so that it effectively leaves the party with Player1 on the beach.
Now I need to do more testing to see what happens when Player2 is labeled with IsPlayer even if they're not in the party.