The housing in Belmont Shores was indeed south of PCH, but PCH itself was lined with commercial establishments -- restaurants, hotels, etc. dating back to at least the late '50's and early '60's; an old college GF and I used to go bowling in lanes located at the corner of PCH and 2nd Street (which turned into Westminster Ave. east of PCH); this was back in 1969-70. It's likely any potential freeway corridor would have paralleled CA 1/PCH just inland of the existing route; that would have taken out a couple of trailer parks and older housing stock south of 7th Street and CSULB; it is also likely that a route like this could possibly have been squeezed in between PCH and the USN armory, only taking a sliver of land from the federal reserve. The only real obstacle would have been the wetlands at the mouth of the San Gabriel River (winter outflow from the river, like the LA river to the west, largely a flood-control channel in the flatlands, didn't reach the ocean due to sandspits, but instead fed those wetlands). The commercial strip along PCH extended for about 3-4 city blocks SE of the 2nd/Westminster intersection and abruptly ended with a PCH/CA 1 overpass over a naval base rail line that extended to a group of piers along a dredged inlet located where the San Gabriel River would have flowed into the ocean if not for the sand buildup and subsequent water diversion into the wetlands north of PCH. The piers served, during the Vietnam war years, as a loading site for munitions heading for the South China Sea (with, on some weekends, small cadres of war protesters lining PCH along the overpass).
But all the plans I've seen on '60's editions of the official state highway map showed the cross-Long Beach freeway, deleted by 1978, traveling east-west along 10th and 11th streets before segueing down to 7th to pass south of CSULB along existing CA 22;
I don't recall seeing any indication (in the usual form of a row of circular dots) of any planned or even conceptual cutoff paralleling CA 1 between 22 and the original CA 240 route heading south as a virtual continuation of the I-605 path.
While the CA 1 alignment through Long Beach and Wilmington was pretty much due E-W, at its western end it curved north to avoid Palos Verdes (another NIMBY stronghold!), threading the needle between PCH and the massive Mobil refinery between Western Ave. (CA 213) and Crenshaw Blvd. in Torrance. Rather than draw the ire of coastal residents in Redondo Beach, the freeway facility left the CA 1 corridor east of Hawthorne Blvd. and became a freeway segment of CA 107 north to a terminus at I-405 near Lawndale. That, too, was deleted along with the Long Beach section by 1978.