My thinking isn't from anything I learned about Freud but from direct exploration and then I go research to find out what is happening. I suggest you look into the term "urethral sponge."

Also, you said what I said--that there are parts of the clit that are actually inside the vagina. You allude to it in your quote where you talk about most of the female analogs to the penis being underground, but for whatever reason you're not drawing the connection.