OK, what you did wrong on the cancellation was to queue up and listen to advice. Nothing wrong with that, I'd have done the same two years ago before being sucked into the Flyertalk craziness.
The train to C Gates and in via immigration is a well worn path. They discourage you from doing it, but it's still the thing to for a cancellation (but not if you want to reenter the terminal the same day, it can be very difficult getting back in). Then don't queue for hotel vouchers, get on your phone immediately the cancellation is done, and book yourself into the Sofitel, ideally using the avios.com hotels section in "my avios" (15 avios per £). Then out via C gates train, check in before the hordes arrive, keep receipts up to around £200 for hotel and food (not alcohol), and send them in at your leisure for a refund.
I would probably have left my bag loaded by the way, the Sofitel can provide most necessary amenities that I don't carry in my hand luggage.