I think Dumbledore's fear has definitely gotten worse as Harry has grown older in this universe. He sees that he's failed him, but that makes him more afraid for the future instead of resolving not to fail again.

And as for not noticing abuse, I think that's difficult in the real world. Abuse can happen in front of other people for years and they'll not notice it if they don't think that the "signs" are there or it doesn't suit their interests.