The issue I see here is that Kallen's family subplot was...already in the background. I think it served most of its main purpose already: to establish her character.
Her mother's either jailed or in a hospital (or both) and Kallen's fighting for her sake, her brother's dead and only alive in spirit as a form of motivation (unless you expected otherwise, but I'd guess not), and her father was in Britannia without even giving us a hint of why that would absolutely need to come up.
Granted, her father could have come into play during her captivity (assuming that would still have happened) or if the action had ended up in Britannia earlier on, which could have been interesting and an improvement of her character, but other than something like that I don't immediately see any room for that much more.
The fanservice was always there -as was the Gundam homage-, it's even inherent to her design (just look at her clothes if nothing else), although it did get a bit more blatant in quantity if not quality. Would that have happened anyways? Hard to say, but it would not disappear all of a sudden.
Finally, R2 seems to have gone in the direction, originally planned for season one but cut during production (according to Celiss Galvea, who summarized the recently famous Taniguchi interview and translated lots of other stuff back in the day), of developing a more romantic subplot between her and Lelouch. In that sense, I think R2 is actually, ironically enough, closer to carrying out part of the staff's original plans in that regard, in spirit if not to the letter.
