The Madussa thing was interesting but it generated only a little buzz, she was Womens Champ and at the end of the day Womens Wrestling is an under card side show, big events and ratings aren't drawn based on the Women's Storylines.
The Flair-91 thing was worrying Vince. WCW already had taken advantage of the fact they aired live every week (when RAW was usually taped) by giving out match results before they aired. Everyone talks about the Nitro/Foley/Finger Poke Of Doom incident but I remember Nitro giving away WWE results back before the NWO storyline started, circa late 95-early 96 (right around time Nitro started surging ahead in the ratings, early 96, six months before the NWO story hit full gear, although WWE would rebound and the two would stay close by W-Mania time)..
If you could get the guy who for better or worse was the de facto face of WWE for the past half decade to not only appear on your show but do so as World Champ, THAT WOULD BE A HUGE SLAP IN THE FACE to WWE and make WCW and Nitro look so strong as the dominant product and show (at a time when WWE wasn't strong to begin with).
It was the exact same concept Vince used in 1991 when WCW fired Flair, with fans actually protesting and loudly chanting "We Want Flair" during WCW shows (watch the 1991 Great AM Bash Main Event, maybe the most embarrassing point in WCW history) Vince had Bobby Heenan spend a full month on WWE TV proclaiming the arrival of "The Real World's Champion" to WWE. It was a huge insult to WCW and invite to their disgruntled fans, made worse by the fact that the very recognizable huge gold belt was being plastered all over WWE TV. If WCW & Nitro could have done the same thing with Hart, exaggerated by the growing presence of the internet (not a factor in 1991) and live TV (everything was taped and shown later in 1991) it would made WWE look even weaker and more sad than 1991 WCW did (which is saying something).
Now Flair had turned down WWE offers before, including a big one in 1989, and in fact likely would not have left WCW if he had not been released after contentious contract negotiations (cut his pay in half, change his name, turn him into a Roman Gladiator character, etc). Leaving for greener pastures (which he almost did in 89) would have been one thing but the way Jim Herd & WCW treated him on the way out, combined with financial dispute over the money the company owed him for the title belt, left him in fairly bitter state, he had few qualms about taking the title and the belt to NY and embarrassing his former employer. Hart likewise was pretty much WWE for life, although by 1996 he was admittedly unhappy with the over all tone of the product storyline content and his own heel turn (Hart was never a fan of "Attitude", he preferred the more traditional kid oriented booking of the 80s). Still, if Vince didn't come to him and tell him point blank he wasn't going to honor the financial agreement they had made and advised him to see if WCW would match it (and take their deal if they did) it's unlikely Hart would have left. Vince had to be worried that Hart might just be bitter enough about being pushed out to pull a similar stunt as he did with Flair in 91, although Hart probably wasn't quite as upset as Flair (Flair reportedly offered to stay and lose the WCW Title at the next PPV but WCW just terminated him mid storyline, THEN the dispute over the money they owed him started).
I tend to believe Hart that he wouldn't have taken the WWE title to Nitro and embarrassed WWE like that, even after being let go I think he still felt enough loyalty to Vince for giving him his big break he wouldn't have done it even if asked (Flair didn't have that loyalty to Jim Herd who was a mid level TBS employee tasked with running WCW, his loyalty was to the Crocketts and they were long gone by this point).. HOWEVER, Vince was in "the fight of his life" trying to revive his company and make them relevant against a much bigger and better funded rival and at this time he was losing, plus there hasn't been much loyalty in the wrestling business, especially when someone is scorned. The NWA (including Jim Crockett who at the time was still in charge) fired Dusty Rhodes to insure that Flair wouldn't leave for WWE (Crockett couldn't sell the NWA to Ted Turner unless he delivered Flair). Hulk Hogan was the face of the NWO , the same man Vince made a mega star out of and built his fortune around. Lex Luger literally showed up on Nitro one night after wrestling on a WWE PPV while everyone believed he was re signing with the company. While I believe that Hart wouldn't have embarrassed Vince & WWE like that I can see why Vince would be worried, and with Hart continually trying to avoid losing in Canada (where the PPV was being held) I can see why he might be suspicious. Add to that Hart's vocal displeasure with the programming in general and the very real behind the scenes animosity with HBK (the guy picked to beat him and now clearly the top guy in the company) and Vince starts to look like the guy who may be paranoid but people really are out to get him.
Bottom line, Madussa wasn't the catalyst for Montreal 97, Flair 91 was, I don't think Vince needed to do it but you can easily understand why he felt he did.