"To someone who was asking about the blues, 'Jazz' Marion mentioned both the 'blue note' and the 'blues,' and talked about the 'blues' not being on the sheet music ('never written into music') [... if] the mellow-about-words Seagrove quoted him correctly" is not a misreading of

"At the next place a young woman was keeping 'Der Wacht Am Rhein' and 'Tipperary Mary' apart when the interrogator entered.
   'What are the blues?' he asked gently. 'Jazz!' The young woman's voice rose high to drown the piano.
   A tall young man with nimble fingers rose from the piano and came over. 'That's me,' he said. And then he unraveled the mystery of 'the blues.'
   'A blue note is a sour note,' he explained. 'It's a discord – a harmonic discord. The blues are never written into music, but are interpolated by the piano player or other players. They aren't new. They are just reborn into popularity. They started in the south half a century ago and are the interpolations of darkies originally. The trade name for them is 'jazz.'"

Whereas "... blue notes on sheet music, which is what Jazz Marion was talking about..." is a misreading of it.

We don't know what "Jazz" Marion was thinking, or even if he was quoted correctly. Seagrove acted in the piece as if being precise could be not as fun as being less precise.

"It would make no sense to say that 12-bar blues" Nothing was said about 12-bar strains in the article. As of 1915, 16-bar blues strains were considered blues strains, e.g. by the white composer Euday Bowman whose "Kansas City Blues" was published in 1915.