If I use the rainbow wires to true bypass it to the send/return, would removing the switching PCB ensure that the pedal circuit is permanently on as power is sent to the pedal?
As long as you connect power to the main board where it originally was (green wire according to my post), you'll be fine and power will always be supplied.
Also, am a bit lost about the ground referenced signal bit. How can I achieve it? Any links/suggestions regarding that?
Your signal will be ground-referenced as-is. "Ground-referenced" just means, in this context, that you don't need to put any additional circuitry - just connect the input jack to the main board.
You could certainly put in a sag control. Just wire the +V from your power jack to the center lug of a pot (looks like beavis uses 10k) and wire one of the side lugs to the main board +V input.