The part about the guy being hospitalized sounds like the story about the lead Sonic Xtreme programmer who was hospitilized for the same reason.
Interesting stuff, but most of it sounds like bullshit. People always want to believe these elaborate stories, but the simplest answer is usually the right one.
Pretty much all those stories contradict themselves or what is already known in reality.
I don't think a working version of the game was ever shown to anyone.
If the EGM guys did go to Japan to play something, they probably really just watched or possibly played the arcade game hooked to a monitor, like how the mags kept showing us arcade footage of Daytona USA that they said that Sega told them was the Saturn version.
I don't think that Capcom would have had any involovement in the SuperGrafx game, since they never made a single PCE game(other than doing a quick SFII'CE port for NEC) and the other Capcom SGX titles were made by others as well.
Which right away throws out all those Capcom development stories.