After a day of searching found an expansion of the ideas of Rabbeinu Bachya in Rav Moshe Dovid Valli's peirush on sefer Devarim. Connecting the ideas from the first volume to the ones in the second volume, the mezuza has 2 different functions (albeit very much related to each other):
- revealing the Divine presence in your midst is alluded to by the full spelling of mezuza with is gimatria 65 (like the name mentioned in the question, alluding to the Divine Presence); and
- protecting you from the other side and from the evil inclination, which is alluded to by the shortened spelling, since the letters of מזזות (in the 1st paragraph) can be rearranged to spell זז מות.
Interestingly, I also saw in Rav Hirsch on 6:9 that he derives mezuza from the root zaz...
So perhaps one can unite both of the above ideas in a single framework as follows. The first paragraph of the Shema is really describing a tzaddik (or the higher, elevated self in every person, which is deeply connected to the Divine). This is one of the reasons why reward and punishment are not mentioned and the focus of the paragraph is on loving G-d and expressing that love, which is the major motivation for the actions of a tzaddik. Such people exist in a place which is protected from the evil inclination (e.g., in Tanya, a tzaddik does not even have one) and so the allusion to this spells mezuza without a vav, making an allusion in that the word mezuzos now has letters from zaz maves (the 2nd idea above).
However, for a regular person, who is very much from the second paragraph of the Shema, the word mezuzos is spelled out in full to allude to the singular mezuzah which when spelled full is gimatria 65 (like the name אדנ-י), alluding to the Divine Presence being in the life of every Jew.