This is backwards: This comment (and its grandparent) makes it sound as though Knuth set out to create a typesetting system and a font creation system, and then was faced with the choice of who would design the first font for the system. In reality, his work in typesetting started with a very narrow goal: when the publishers of TAOCP were about to set the second edition of Volume 2 using phototypesetting (instead of hot-metal typesetting as in the first edition of Vols 1–3 and 2nd edition of Vol 1), he found the galley proofs awful, and at the same time he came to know of the existence of a digital typesetter, so he thought he might be able to retain the appearance of the first edition. That's all there was to it; it was supposed to be a three-month one-off job specifically for TAOCP (and later volumes/editions thereof), and he even thought his grad students could code up the whole thing over the summer while he was away.
More concretely: the design of Computer Modern is based on the typeface used for the first edition (10-point Monotype Modern 8A, etc). It's not identical, but you can compare say, the first (1973, Monotype hot metal) and second (1998, using CM/Metafont) editions of Volume 3; it's substantially the same typeface; at least most people's criticisms of Computer Modern would also apply to the font he found so beautiful and which he was trying to reproduce. (Except the "spindly" or "too light" complaint which is not a problem with "true" CM but only with the TrueType/OpenType version used today by nearly everyone except Knuth: see https://tex.stackexchange.com/a/361722/48 and the comment below it, and http://mirrors.ctan.org/fonts/mlmodern/doc/mlmodern.pdf.) In fact, he says he was excited when Addison-Wesley approached him to write a textbook (in the early 1960s) because he loved their typesetting so much.
His goal at first was simply to reproduce the same font digitally (TeX was created only because of the necessity of a system for using those new digital fonts). He approached Xerox (PARC, I think) to use their high-resolution equipment and obtain a digital scan of the Monotype font. If they had agreed unconditionally, that would have been the end of it, and METAFONT wouldn't have existed. They insisted that any font created digitally using their resources would belong to Xerox, which Knuth thought fair but unacceptable to him, so he set out to reproduce the font with the resources available to him. While staring at blown-up images of the letters projected on his wall at home via a TV camera, he had the realization that the shapes were not entirely arbitrary and therefore perhaps he ought to describe the shapes in terms of curves rather than simply capturing the shapes as numbers, and his syntax (and implementation) for describing these shapes turned into METAFONT. His shapes (glyphs) for CM did diverge from Monotype Modern a bit, with all the feedback he got from people like Hermann Zapf and Matthew Carter and Richard Southall and Chuck Bigelow & Kris Holmes and Neenie Billawala (one of the Stanford students)—these are the people credited in the preface to Volume E (Computer Modern Typefaces)—but it's not as if he sat down to design a typeface ab initio in a system that he had already built or was planning to build. METAFONT is simply the collection of tricks/code he came up with for the problem of creating a computer version of Monotype Modern (thus the name, "Computer Modern").
Much of this story is narrated in his Kyoto Prize lecture of 1996 (https://web.archive.org/web/20201111041445/https://www.kyoto...), reprinted as the first chapter of his collected volume Digital Typography.
The last paragraph you quoted is from a joke/satire/parody (https://tug.org/TUGboat/tb31-2/tb98knut.pdf / https://www.youtube.com/watch?v=eKaI78K_rgA) and represents the opposite of his views (https://yurichev.com/mirrors/knuth1989.pdf):
> Thus, I came to the conclusion that the designer of a new system must not only be the implementer and the first large-scale user; the designer should also write the first user manual. The separation of any of these four components would have hurt TeX significantly. If I had not participated fully in all these activities, literally hundreds of improvements would never have been made, because I would never have thought of them or perceived why they were important.