So this all comes down to how we define "deeper/hidden applications."
If we take the deeper meanings to be things like: perfection of character, self improvement, self control..... then, I agree completely. These things were added later, as you point out.
At a surface level, a lunge punch is a set of moves done in the kata. The application is punching your enemy who is at a distance. The deeper/hidden bits, from a fighting perspective would be understanding that this movement is also a set of joint locks, a set of throws.... The fighting perspective would also look deeper into what the non-punching hand is doing... plenty of fighting applications for that as well.... also the combination of one side pulling and the other side thrusting.
Going further, this set of movements helps to learn how to close distance very fast, without giving warning. It teaches how to explode from stillness. There is a bunch of work on power generation, structure, body coordination, balance, body control (not over extending).... all of these things directly relate to fighting and are taught in this movement.
Going further, the kata forces you to emphasize how you move your body. The motions are big. These teach your body the order of movement, how to move your hips, how to control your center..... No one fights with these big movements.... but the movements you learn can be made smaller and more internal, until the outside observer sees little motion at all, yet you are still able to generate a lot of power, very quickly, in a very small area and focus it where you need it.... be it a strike, a thrust, a throw, a joint destruction... This training helps improve all of your fighting techniques... they are now done more efficiently and with more speed and power.
When you add the moves together, as in a kata, you get more lessons about strategies, tactics, ways to flow from one situation to the other, ways to control your body.... In his book, Funakoshi talks about this stuff. The "blocks" are also joint destructions, strikes to vital points, throws, ....
The Kata were not put together some much as here are the 10 moves we do.... no others, but these..... They were put together more like, here are martial ideas and concepts, everything from the way to teach a beginner, to tactics, and strategies to be understood by the more advanced. Here are a set of fighting principles that will give you the ability to fight, but also the ability to adapt in a combat situation.
You can go deep into the martial / fighting applications, which I believe were there for quite a while or you can go deep into the spiritual, self development, perfection of character stuff that came along much later. (or you can do both...)
