True, McCain wouldn't go truly negative against Bush. But, Bush would be hypocritical against him. Were McCain to win in 2000, you can bet that Bush would be hyping the poll closings up and accusing McCain (as he did IOTL) of going negative. (In OTL, he called a mailing comparing their positions on Social Security an "attack ad".)
As for the SC primary, most of what has been said is spot-on. However, it worth noting two things. First, SC's primary isn't closed. In OTL McCain called on Democrats, Republicans and Vegetarians to vote for him in the primary. (Bush attacked him for it...and it galled me when he praised the Democratic Governor of NC.) Second, while SC rewards candidates who go to the right, it most certainly does not reward the far right. David Duke faired poorly in SC in 1992. Buchanan lost to Dole in 1996. Alan Keyes finished third in 2000. The only exceptions I can think of are Huckabee and Paul in 2008. They lost to McCain, but they trounced Guliani.