I have just cracked the case off and the soldering job looks at bit on the difficult side for me. Can I not use the USB port on the back too flash the router again?
No, the USB port isn't usable for that task (you may be able to avoid flashing over the serial console, given that u-boot should still be fine to use tftpboot - are there better recovery methods for uboot-lantiq without needing a serial connection?). But given that you can enter failsafe mode, I really don't understand why softreset and/ or flashing from failsafe mode don't work for you.
What happens if you go back to step 1.
power off the router
access failsafe mode
execute the "firstboot" binary and say yes to deleting the overlay
reboot -f
Given your explanation, that should already unbrick your device.
fwiw, I notice in your original screen shot, when you executed 'firstboot' in failsafe mode, you entered upper case 'Y' instead of lower case 'y' when prompted.
Just curious - have you tried hard resetting the router by pressing and holding the red Reset button for 30+ seconds? This should've execute the same commands as the soft reset which is a bit error-prone as we see.