So based on this new information, if someone asked you about the history of BJJ, what would you tell them?
Would it be something like:
Around 1900, a few Japanese immigrants brought Kodokan Judo (then called Kano Jujutsu) to Brazil. The five Gracie brothers (Carlos, Helio, George, Oswaldo, Gastao) studied with Brazilian students of the Japanese Judoka and some of them began doing submission grappling matches with practitioners of other styles found in Brazil such as Capoeira, Luta Romano, Catch as Catch Can/Luta Livre and Western Boxing.
Over time, the Gracies used their Judo training and added techniques from other styles to formulate their own version of Judo that they called Gracie Jiu Jitsu which consisted of basic throws and takedowns in order to get the opponent to the ground where they could establish safe positional control and work towards submissions if possible.
The next generation of Gracie's (Rolls, Rickson, Carlos Jr.) traveled to train and compete with American wrestlers, Sambo practitioners and Judoka which led to further refinement of the Gracie Jiu Jitsu style making into what we know it as today.
I never got a chance to answer this, but I think you're on the right track.
Jiu-jitsu and judo were terms used (somewhat) interchangeably at times. Regarding who innovated what, it can be a tough thing to quantify. It seems judo is at the heart of Brazilian jiu-jitsu. It's just not necessarily the straight line (Maeda --> Carlos Gracie ---> etc.) that some have claimed.
Jiu-jitsu was part of a larger "fighting" scene in Brazil of the day. Pedreira notes that "jiu-jitsu did not exist apart from other martial arts, and many people cross-trained or moved from one art to another, or created their own styles out of elements with others."
It seems some from the early period simply learned from books like Hancock's "Complete Kano Jiu-Jitsu" (which Jigoro Kano himself described as having nothing to do with his judo).
In fact, it's still a little unclear on how Carlos Gracie began his training, but he definitely eventually trained with Donato Pires, who was a Maeda student. Carlos and his brothers eventually began their own academy.
Carlos, George, Helio, and Oswaldo Gracie all competed in matches, of various styles: some vale tudo, some grappling-only, some with gi, some without. Gestao Jr was an instructor, but there's no record of him fighting.
Helio became the most prominent instructor of the brothers, and was an important fighter in the early days -- using a defensive style. George was more active as a fighter, and is noted for a more aggressive style than his brother. Both used groundwork more than standup. George also admitted to working some bouts. Comparing the merits of the two is a little difficult.
Among the next generation, Carlson Gracie (Sr) was an important fighter and trainer. Rolls Gracie, who traveled to compete in SAMBO and wrestling (along with Rickson Gracie and other jiu-jitsu artists), is another important trainer who is credited with adding more innovation to the style.
There were always people outside the Gracie family fighting under the banner of jiu-jitsu in Brazil.
In the mid 90's, Royce Gracie's UFC success sparked worldwide interest in Brazilian jiu-jitsu. Later, Rickson Gracie became a star in Japan. The Brazilian Jiu-Jitsu World Championships and Abu Dhabi submission wrestling championships were established, and grappling competition took on a life of its own.
There's a whole lot more to talk about, but there's a quick attempt at a rundown.
