He definitely was writing for Hollywood. Per Harlan Lebo's definitive "The Godfather Legacy," Paramount gave him a stipend while he was writing the novel because they were looking for a new Mafia movie. The stipend didn't constitute a commitment to buy his novel, but it sustained Puzo while he wrote.
As for Lucy's operation:
Like Ian Fleming, the James Bond author, Puzo couldn't resist throwing in every bit of erudite or off-the-wall info he'd accumulated. Evedently a female close to him had had that operation and Puzo had interested himself in the procedure. So he threw it in the novel ad nauseum. I was annoyed to have to read through all that Lucy/Jules crap, only to learn that the purpose was for Puzo to show off what he learned about the operation. At that, most of the later Johnny/Nino stuff was to show off what he learned about Hollywood. Bad as it was in "The Godfather," the Hollywood stuff practically ruined "The Last Don."