can't tell how things worked operationally, as I wasn't around. I can tell you what the key does to the Tx, as I have just added AP2548A Vol.1 Ch.1 to the VMARS website (where anyone can grab a copy if so minded). This has all the circuits for each model.
As you rightly say, the key controls a keying relay (designated A/12), which switches the following items between send and receive modes:
a) the MF aerial between the Tx o/p and Rx i/p
b) the HF aerial between the Tx o/p and Rx i/p
c) the phones between the Tx sidetone and the receiver audio
d) with the key down the negative bias on the Tx valves is removed thus producing output