Well, even after my avalance of clues, the character-as-author quiz remains unsolved... so here are the answers.
Any more novels I should read with characters who write?
1.) Her manuscript was burnt by her sister.
Jo - Little Women by Louisa M. Alcott
2.) Struggling to follow up his masterpiece Jacob Wrestling, he eventually wrote a novel which began 'The cat sat on the mat'.
Mr. Mortmain - I Capture the Castle by Dodie Smith
3.) Based on Marie Correlli, this selfish girl wrote romantic sagas, and didn't understand that a large percentage of her buying public was laughing at her.
Angel - Angel by Elizabeth Taylor
4.) This Jewish writer had a typewriter called Minnie.
Toby - The L-Shaped Room by Lynne Reid Banks
5.) This vicar's wife wrote romantic novels, dictating them to a secretary, and wrote so many at once that she got the plots and characters constantly confused.
Mrs. Sanders - Frost at Morning by Richmal Crompton
6.) Two Victorian poets, whom 20th Century academics discover were lovers.
Randolph Henry Ash and Christabel LaMotte - Possession by A.S. Byatt
7.) She wrote detective novels about Finnish detective called Sven Hjerson, and was a parody of her own authoress.
Ariadne Oliver - lots of Poirot novels, by Agatha Christie
8.) Having published a 'minute and unpretentious literary effort', her children compare her to 'Shakespeare, Dickens, author of the Dr. Dolittle books' and her husband says 'It is Funny - but does not look amused'.
The Provincial Lady - all the Provincial Lady books after the first one, by E.M. Delafield (these quotations from The Provincial Lady Goes Further)
9.) This detective novelist was arrested for the murder of her lover, and later married a man with a monocle.
Harriet Vane - several novels by Dorothy L. Sayers