People will tell you that you can't do this or can't do that, but you can definitely achieve your goals. If it was done before, it can definitely be done again.
As well as starting from scratch, you might otherwise be able to achieve your goals by finding individual fish (from the original contributing species) with the traits you desire and breeding them back in to fertile flowerhorns to provide the genetic diversity and personality you're looking for.
When you're trying to establish your own personal strain of any fish, and I might be wrong, but I believe in the early days there's less culling and more growing out... because you're wanting to see what you get out of your broods at the end. Fish that seem right at first, might end up undesirable in adulthood (and vice versa).
Developing your own strain of a fish is cool af and, I'll say this again, people might discourage you or focus on how much work it will be or, as in this case, say your early fry will be undesirable... but the reality is that if you're passionate about it then it won't seem like work at all and you will reach your final goal eventually. And the journey will be fun. Time-consuming fun! That's the point of a hobby, to consume time with something you enjoy.
I'm a bit of a softie, so I'd struggle with the culling involved myself. I just wouldn't like to cull healthy fish because they're not what I want--if I had the space and/or connections to provide the bulk of any brood with good homes then I'd be more inclined to go for it.
Either way, interesting idea and if you go for it be sure to--if you can--document it and keep us informed of your progress.
GOOD LUCK TO YOU AND YOUR FRIEND ^_^
P.S. Try to reach out to Asian breeders, a lot of them are in Facebook groups and discuss lots of breeding tips for the CA hybrids they produce. They'll be a really good source of information I think.