And if so, how?
The Church is not locked in stone. She has grown like a child grows up. But the Church has always been the same "person". She has not undergone destructive surgeries like other segments have.
One way is the standardization of rubrics. This stems from St Paul's command to do everything in an orderly fashion. It was not possible to do this during the Roman persecution, so after the Edict of Milan we see the Church make a lot of progress as far as standardizing practices. This is both for the sake of order, and to make it easier for priests and bishops to concelebrate. This is not a change in the liturgy, because it is still in essence the same thing. Rather it is a clarification of the existing accepted truth for the sake of clarity. That is what kind of change we have.
As I understand it, Holy Penance did not exist until the 4th Century when it was introduced as a "compromise" for receiving back the lapsi without some sort of "re-baptism." Did it have some kind of equivalent beforehand? If not, does this mean First-Third Century Christians could be saved without confessing to the Church? Similarly, how is the switch from congregational to private justified, as an economia based on the weakness of the laity in general?
In the early church, people confessed openly to the congregation. This came to be viewed as scandalous, not the least of which for the sake of the children present, so sacramental confession became private. However, AFAIK it has always been tied to the sacramental absolution, and that has never changed. Only the means has changed from public to private.
Interestingly, the Church has never condemned public confession, and it is still canonically permissible. Generally there is no need for it, but I could see circumstances where a person could have hurt the entire parish community and such a thing would be healing for all involved.
Also, how can the pre-sixth century absence of iconstases be explained? I know they are a continuance of the something from the Jewish Temple, but still it seems like the Church was absent this tradition for the first several centuries (and for that matter, if icons are so essential to proper worship, how are we to account for them not being widely venerated until the iconoclasm)?
The Iconostasis, the Rood Screen, the Altar Rail, and all other similar liturgical barriers have a common ancestor in the Templon. This was essentially a low wall surrounding the altar area. Larger churches may have used a freestanding row of pillars, topped with a beam or arches. These walls have been found in the earliest churches and presumably have always been used.
This was partially inspired from a device from Greek theatre, the proscenium:
(Note even the central and outer doors on either side.)
This was a feature of Churches in both East and West.
After Iconoclasm, which hit the East particularly hard, they began hanging icons between the pillars. The church at New Skete (below) is designed this way. This likely is what an Eastern Church looked like around the 800s or so:
This became so commonplace that eventually they were built as solid walls instead of spaced pillars. In the West, the Templon continued to exist in various forms as well. One of these is the Rood Screen, which is especially associated with traditional English churches:
During the Counter-Reformation, the Roman Church removed many of these to erase the perceived barrier between the priest and the people, though it continued to exist in some form as the altar rail.
Finally, how does this relate to the Roman Catholic concept of doctrinal development? This really sounds like "development" to me if not innovation.
This describes actual changes in belief. In Orthodoxy, we believe that every teaching we hold today is present in the ancient Church. Things have become better-defined, understood, and described, but there are no changes
. The development of the Iconostasis shows this. That feature has always been present, but it took some 1500 years to grow into its current form. And it may well continue to develop in the future. But all the while, nothing has truly changed
On the other hand, we believe that Rome has indeed changed
her beliefs over time.