Without a doubt, the fact that so many aspects of the story are more easily grasped the second time through contributed to the "plothole" allegations in some early reviews. Most of these reviews were dated November 2004 and it makes sense that the majority of reviewers would not have had time to absorb the saga of City 17 in one sitting.
It reminds me of the title sequence of the film "Get Carter" in which the title character, played by Michael Caine, is riding the train to Newcastle. Perceptive viewers, watching the film for a second time, are likely to notice a certain startling detail in this scene, but without having seen the film once, there would be no way to grasp the significance of this detail.
See the "Stuff I only noticed the second time around" thread for an elaboration on this theme.
I agree, however, the reviewer in quesion in that link you provided still seems to believe that the story makes 'no sense' in his Episode 1 review.