I can now update and close this thread with a happy/sad ending.
After I last posted I drove for another 3000 miles. During this time, the noise got noticeably worse. It was a long way from unusable, but enough for some people to comment, and certainly not tradable/sellable.
I opened a case with Honda UK, who said initially I should deal with my Honda dealer. So I had a meeting with the Honda Service manager, (not the people on the service desk). My main question was whether it would be better to face up to the problem now with a five year old, usable car, or wait until the car was older and worse. He was very clear, Honda would more sympathetic to a 5 year old car than a 7 year old car, and anyway it might fail more seriously before then.
I had a long test drive with the chief mechanic who felt that problem was probably differential bearings. The estimate (not quote) for this was about £650 labour plus £150 parts, which the Service Manager was confident would be paid by Honda UK (parts only).
So I told them to go ahead. They removed the gearbox and stripped it down. It was not diff bearings, but the main cone bearings in the CVT. These are not replaceable except by replacing the whole CVT unit, part cost £5,165.22.
Honda UK were willing to contribute £1,400 so the whole job would cost me £4,200.
Options I considered hard:
1. I found an independent transmission specialist who would do it for £2,500. Couldn't get a clear answer about the source of parts.
2. Honda reassemble with fault (£350). I find garage to fit a used CVT I found on eBay for £250.
3. Legal action to pursue Honda for bigger contribution. Honda UK advised me to start with
MotorCodesI had another meeting with the Service and Sales managers at my local Honda with all cards on the table, and asked what were Honda (UK and Dealer) going to do to make me a happy Honda customer again.
A day later they came back and said that they would take my car in its un-repaired state for its standard trade-in value minus £500, against a new Mk 3 Jazz. So the whole problem would only cost me £500, but I would have to buy a new car. They didn't fiddle the trade-in price because they had previously given me a trade-in value for it before all this blew up.
Although not normally my policy to buy new, this seemed like the best of a bad lot as far as extricating myself from the situation.
I said to them that some people would say I was mad for buying another CVT after this, but apparently Honda UK Parts dept have never had to supply a CVT unit in the UK, so I have to assume that I was just very unlucky.
The happy ending is that I am enjoying my Mk3 SE CVT!