I still don't see why Neil "sees that the ground is stretched". Neither do I see why Neil should adopt a non-inertial frame. The planet can move as it likes, but as long as Neil stays at one point on this planet, to Neil every (relevant) thing is as inertial as can be and, moreover, as motionless as can be. So no contraction, no time dilation and no stretching.Neil does not see his triangle as length contracted. He sees that the ground is stretched and does not see it as length contracted. Thus the triangle is shorter than the dots.
Note that any explanation for why the ground is stretched will involve a global description of the planet. Neil will have to adopt a non-inertial frame or else regard most of the planet as moving - either way, he can't use simple inertial frame results to do it.
To Michael however, things are indeed non-inertial, as the planet does not take up linear speed, but rotational speed. Some people will probably say that SRT is therefor not applicable here, but that would make the whole Ehrenfest-paradox disputable.