Looks reasonable, thanks.

> +(defcustom add-log-use-pseudo-changelog t
> +  "If non-nil, don't create ChangeLog files for log entries."
> +  :type :boolean)

I frequently find that what we say in the doc string is a very good
hint on how to name the variable.  So how about
add-log-don't-create-change-log-file instead?

Also, this needs a :version tag.

> +(defun add-log--pseudo-changelog-buffer-name (changelog-file-name)
> +  "Compute suitable name for a pseudo-ChangeLog buffer."
> +  (format "*changes to %s*"
> +          (abbreviate-file-name
> +           (file-name-directory changelog-file-name))))

Would the name of the buffer be something like "*changes to ChangeLog*"?
That's awkward, IMO.  How about just "*ChangeLog*" instead?

The above are minor nits, so what else is left that needs to be agreed
upon?