I'm not sure it is good to be able to answer one's own question and it is not a complete answer. However, there is always a workaround, isn't there?
I copied the original chapter and book files to a new directory and then used the "Convert Bullets and Numbering to Text" command (select all in text flow and right-click) to do what it says it does. I then replaced the text in the long single document by cutting and pasting.
There was a bit of messing about to sort out some formatting that hadn't come across, but basically problem solved.
HOWEVER, it would make live much simpler if In5 could work with .indb files: please!