Dudley did know what was happening to Harry but he had been indoctrinated by his mother to believe that Harry was a freak who deserved whatever he got. It takes a bright, inquiring mind to look at the situation in which one has lived all their lives and think 'this is not right because of a, b and c' and Dudley just doesn't have that type of mind; In the cannon, Dudley accepts it when Harry is locked in a cupboard, starved, emotionally abused and treated as a slave and, indeed, endorses and aids his parents neglect by beating Harry up and frightening away potential friends. In this fic, Dudley 'sees the light' and, like many people who suddenly find themselves complicit in abuse, he pretends that he knew all along that what was happening was wrong but was too scared to speak out.

Thanks for the compliments; I'm really glad you like the idea of Hermione being in Slytherin. In the canon, we see the Slyths from an outsider and aggressor's point of view. Although it is arguable that some of the Slyths would not have developed into nice people whatever the circumstances, there is a degree of self-fulfilling prophesy: Harry is told that Slytherins are evil, backstabbing bastards and, because he treats them with suspicion and contempt, they act like evil, backstabbing bastards. However, from a friendly, insider's point of view, the Slyths are going to show the nice sides of their characters and, with the softening influence of Harry and Hermione, could develop very differently.