Second, even if Yamamoto's body hadn't been destroyed, he didn't have the King's Key sealed into his bones, as he wasn't a member of the 0 squad. He knew that the 0 Squad were the key themselves, but he didn't have the key.
I'd have to disagree with this. It was stated a long
time ago that the King's Key is passed down through the generations from one Captain Commander to the next. This implies that Yama did indeed have it.