I discovered a new problem. I thought everything would work now and then found it didn't. But I've found the reason.
I installed Previewer 2.7. I installed the updated InDesign Plugin 0.972. This has two important changes over 0.971:
1. The font bug is fixed. They have done it by using font-size specified in rem instead of pt. Great news - no need in future for me to edit the output to correct this.
2. It allows the start postition to be set. You just insert a text anchor and during the export you say which text anchor the start postion should point at.
So I output a new file from it from my tiny two page test book. It is supposed to start at the beginning of chapter 1. I put that .mobi file on my Kindle 3 Keyboard, running 3.4, and it didn't work. It started on the title page. I looked at the unpacked and unzipped kindlegen source and it looked correct to me.
Next, without changing anything, I took the .opf file from the kindlegen source and dropped it onto the Previewer. It created a new file. I put that on my Kindle, and it worked perfectly.
After some thought I looked at the Export to Kindle folder under plugins under the InDesign program and found kindlegen.exe there, as expected. Its date was from back in July. So they have failed to supply the new Kindlegen with the new plugin. I replaced the file with kindlegen.exe from 2.7, and went into InDesign and exported again. This time it all works!!!!!!!!
So I am now in the happy position of being able to create books in InDesign with no editing of the output files being required.