Hey Ken,
(Note: your essay is next on my list, by the way. Hope Cambridge is treating you well this summer!)
Thanks for the comments. Ignoring the entropy thing for a minute, I think the larger point is that contextuality tells us that there is a distinction between information and an information carrier. But I don't think that information is necessarily objectively encoded in anything. You're absolutely correct about the Schumacher and Westmoreland quote. It's precisely contextuality that *makes* it subjective in the first place. Classically, the fact that I, say, am 5'8" tall in my own reference frame is an objective fact. But on a quantum level, objective facts are few and far between.
So I guess it comes down to the fact that I don't really understand your objection. And I wouldn't say entropy "propagates." Entropy is really just a measure of possibility. In fact when we think of it that way, there is no difference between the various forms.
I disagree that orthodox QM says that unitary evolution tells us that fine-grained entropy never increases. That's only true if you ignore contextuality.
(Regarding spacetime and entropy, I personally think spacetime is emergent so I think there could be a relation there, but I'd have to think some more about it. The problem is that you fundamentally believe that we should be building our theories on top of relativity whereas I fundamentally believe that we should be building our theories on top of quantum physics. :D )