I don't understand the argument in (c) implies (a) of this proof. Why is it that "it suffices that ... is quasicompact."
This is Proposition I.2.7 of EGA IV, Chapter IV, Etude Locale des Schemas et des Morphismes de Schemas.
I don't exactly know what 1.1.1 is a reference to here. The most relevant thing I see in that section is the point that if a map $f : X\to Y$ is locally quasicompact (i.e. $Y$ admits an open cover by $\left\{U_i\right\}$ such that $f^{-1}(U_i)\to U_i$ is quasicompact) it is quasicompact. But I'm not sure how this helps us here.
I agree that the proof has a gap, and this has been complained about on this website at least once before here (though there are some extra assumptions in that post which are not made here, so the proposed solution is not quite applicable for you).
If you assume that the $U_\alpha$ are affine, then this is proven at the Stacks Project in tag 01K4, though as you note in your answer, any quasi-compact but not quasi-separated scheme like $\Bbb A^\infty_k$ with a doubled origin is a counterexample to this claim by taking the trivial open cover.
Here's the lemma and proof transcribed for posterity: