I was also unhappy with Clara's response, but she was very young and knew that she was ignorant. Murdstone used that to dominate her. I'm sure Clara thought it would be good for little Davy to have a respectable father with money who could give him more opportunity. She did try to intervene when he was being flogged, but she never saw him, she only had Murdstone's version of events. And the common wisdom was "Spare the rod, spoil the child", etc.
Renee, can you tell us something from the biography? I think I read that Dickens was sickly as a child and that was where he got the memory of being inside and hearing other children playing. (hmm, I wonder if that influences all those sweet sickly children dying prettily in his other books)
I bought the Tomalin biography but haven't started it yet.