Can you, or anybody else, explain why some games' updates tell us old saves will not work? Is it because the DEV has added variables to the game? If that's the case, does a DEV have to set up all the variables at the beginning of a game's conception?
Sometimes it's new variables. Sometimes it's changing older scenes. Of course, a big revamp will blow things up.
For example:
You have a save at the end of release x. For release y, the author adds a flag to a choice about halfway through release x that didn't have a flag before. Then in release y he uses that flag. If he coded it correctly (using the default keyword), saves from past the event won't crash, but might not have the correct choice. If he didn't code it correctly, saves past the event would cause a crash when the (nonexistant) variable is accessed.
We ended on such a cliff hanger and its killing me to know what happens.
Well, you're going to have to keep dying. I don't think we're going to find out anything about that until the next Linda update, 0.8.
He's potentially got six new builds of Ren'py since his last update, if he decides to update Ren'py, and those updates can cause issues with saves.
Updating the engine mid-game is probably not a good idea. 0.5c was using 6.99.14.3, which is even farther behind than you thought. I don't see him updating.