That Island was still ridiculously over sized, unbalancing the ship and taking up valuable deck space that should have been available for the ship's main armament, it's aircraft. With the Washington treaty she still counted towards the British Carrier allowance, being classed as experimental just meant she could be replaced whenever the RN wanted to.
I expect the large island was needed for accommodation or other internal space. I'd love to see a blue print of the island, but have looked online for both Hermes' and Eagles' without success. Unlike later carriers where the space aft of the hangar was used for accommodation, on Hermes (shown below) there's nothing but open sea behind the hangar, even the aft lift is exposed to the sea on three sides (this was a design feature to allow aircraft to be moved from barges right into the hangar (see aft hangar door below during construction).
Notice how high in the water Hermes sits without her island, etc. Also shown in this video of Hermes' launch
http://www.onenewspage.com/video/20170626/8282634/Unique-Ship-Hermes.htm
Not to mention that massive spotting top,
That was for her six 5.5" guns, none of which could be elevated for AA. So, while the island may have a need, the tripod and fighting top does not - better to replace it with a smaller mast for the RDF beacon and available radar, when available. While she'll always be slow and small, Hermes was ideal for simple modifications. Remove the tripod mast, flatten out the aft round down and remove the 5.5 guns and their magazines, etc. For a larger project, consider covering in the aft lift (provided her hull can take it).
Off the top of my head, I would have to assume that both sides would gain some additional measure of readiness from training with/against each other in a series of 'Fleet X' that took place at least once a year, in the spring-summer from 1929 to 1939.....Either the FAA gets a navalised fighter of British origin, or orders would be placed for american carrier fighters.
From 1931, Britain had one of the best naval fighters in the single seat Hawker Nimrod. Its Fairey Flycatcher predecessor wasn't bad either when it entered service in the 1920s.
Getting back to the joint RN-USN fleet exercises, give Hermes a force of 14-18 Flycatchers/Nimrod and 6-8 Dart/Baffin TSRs and she'll represent Britannia ably enough.