I don't see how they were censored. Fatalities missing from MK2 characters were because they would require new frames of animation be created for every character that was not in MK2 and they didn't want to do that. That's also why they didn't have the Pit 2. They would have needed to draw overhead falling frames of every character except MK2 Raiden, MK2 Jax and MK2 Kung Lao.

There are not a lot of things missing from MKT for PSX either. Not that I can find. The sound effects are pretty well intact from the arcade, the musics can get funky because they are redbook, Character wise they had every character plus some alternate versions of characters, not sure what you mean by Options.

And there wasn't much point in using more the CD for the game since the PSX could only handle so large a set of sprites without getting choppy or having even worse loading. I think overall they balanced it well considering the limitations. If anything, MKT for the PC was the biggest tragedy because if they had used the MK3 for PC engine in a windows form that took full advantage of a PC's power even at the time of the games release it would have been considerably better then what it ended up being, but it also would have required development time. The PC version probably had next to no development time because it was simply ported over from PSX.