"I think [Intel engineers] thought DOS would reduce itself to just a minimal procedure to boot the main OS." I doubt the engineer thought about MS-DOS one way or the other. MS-DOS was released August 1981. The Intel 802086 was released a half year later, February 1982. I doubt they gave any thought to MS-DOS.

ANSI C 89 had the new style function prototypes. There may have been compiler support prior to the standardization.

Chances of finding a retro board that costs significantly less than a new Audrino seems unlikely. What are you hoping to accomplish with the retro board that could not be accomplished with an Audrino?