Aaand success: the shader-based skinning is complete: vertices and normals are transformed.
Let's try a simple (e.g. Lambert + Phong) shader.
Seeing if armature animation code still works with dragon mesh - it may need updating.
Creating a small looping idle animation for the dragon character rig in Blender:
Playing the test animation in game engine:
Now it just needs to be made blendable with simulated motion for more realistic idle dragon motion (such as swaying) while the player interacts with the character.
Some interpolation (such as smoothstep) should be used to make the looping animation smooth as it bounces between keyframes.