That author doesn't seem to know precisely what a gold clause is. It doesn't mean there will be payment in gold. It means the amount to be paid is pegged to the price of gold in dollars. The creditor still has to accept dollars though. Gold clauses, which were used almost exclusively in contracts between banks and the government, were a market reaction to the Federal Reserve expanding the money supply. If contract prices were tied to gold the government's ability to monetize its debts would be severely limited.
Indeed it would!
As I understand it a gold clause was an option to be paid in gold or gold equivalent at the option of the lender. Some contracts specified gold and some also specified the gold equivalent as well for convenience because gold is more difficult to transfer. Until 1933 and after 1977 a contractual gold clause can take any form the parties to the contract agree to.
IIRC gold clauses were also common in international business and large business contracts within the US and had been used for a long time as a guarantee against currency fluctuations, political unrest, etc. Basically, as you say, a guarantee against inflation.