It does make him more prone to takedowns but he does have to do something to take the initiative instead of being constantly on the defensive against Cain. JDS isn't really a kickboxer as you said but he better learn fast since his height makes it harder for him to catch someone with punches when they're going for a takedown.
The other option I can think of is better use of angles and staying the hell off the fence like his life depended on it. There were too many times when JDS backed straight away from a takedown or put himself into the fence where he got clinched and beaten on. He needs to slip to the side more and use the angle to hit Cain with punches, then keep circling out to try & keep the distance open. As soon as Cain starts to shoot in, sidestep and unload a couple quick hooks to the body.
And the more I think about it, the more it puzzles me that JDS didn't throw knees when he had Cain in the neck clinch. He blasted Roy Nelson with a bunch of knees from that position so it's not like he doesn't know how to do it. As you said, when you have the shorter guy in the clinch like that you should be working him with knees. He did that with Roy then mixed it up with punches, I just can't figure out why he didn't do the same to Cain.
I guess it was because of the pressure Velasquez put on him. When you're under pressure, you're going to do what you're most comfortable with. Against Nelson he was all the time in his comfort zone as he was outboxing him, but against Velasquez he was rather on the retreat. So yes, he really has to work on his arsenal.
And as crazy as it sounds, I think working on his own take downs and threatening Velasquez the next time could be quite beneficial for Dos Santos.
Cain would KO Overeem with the overhand he landed on Junior. Overeem has good defense but his chin is made of Cabbage (not Coreira, that is actually some hard Cabbage)
Overeem has a pretty wide guard with his hands to protect him against overhands/haymakers which most HWs mostly throw. He is more prone to straights that slip through his guard.
Also, *really* surprised how poor Juniors striking is when he's on the back foot. I always assumed, training with Machida and Siva, that his striking game would cover this area better. Goes to show you, till your see all facets of a fighters game, you cant be sure how good he is. Everybody was so busy focusing on JDS grappling as being the great unknown... none of us considered it might actually be parts of his striking game that would expose him.
Actually training with Silva and Machida of all people won't make Dos Santos that much better in that particular area. They are counterstrikers. What he needs are good offensive (kick)boxers, that put pressure on him, so he can learn how to deal with that situation.