You are basically reinforcing my point.
The "reaction" was the rejection of what Fascists saw as the passivity of many socialist movements (such as the socialist democratic movement) as you stated but it was not a total rejection of the idealism behind the collectivist philosophy itself which via the use of government was seen vital in order to justify the means to their ends in order to achieve the goals stated within Fascist agenda.
That is just it though, the socialist movement was not inherently collectivist, certainly not through the fascist worldview. The socialists were radical individualists, the ideals behind socialism were that of liberal democracy. The work place was not to be run by an owner, it would be run by the workers themselves. Law would not be decided by a ruler, it would be made between individuals. Keep in mind also the idealized endpoint for the Marxist was indistinguishable of anarchism on a global scale. Classes in the socialist model were not hard groups but rather alliances of common interest. The working class unites and so forth not because of some inherent structure or some natural order, but because as individuals their interests coincide.
Fascism is very different, it did emphasize, first of all, heirarchy and meritocracy, that the better people should command and rule the lesser people. Second, it emphasized group identity, in particular as it related to nationalism where it emerged as movements in Italy, Spain, France, and Germany, but later (in particular in Germany) it adopted race as well.
Government structure also were polar opposites. If you read the early writings from the socialists, they envisioned a bottom up government. Local councils would convene for local matters and vote, where larger matter were concerned representatives could be elected and dispatched to regional or global gatherings. Fascism was very much top down, I don't think this requires much exposition. The greater rule the lesser.
Take care not to confuse modern usage of the word socialism, which is basically government runs stuff, with the original meaning which was universal democracy and an absence of centralized power structure. If you want an example, look to Catalonia circa the Spanish Civil War for a good example of how socialism was supposed to work (before Franco killed everyone).
Neither did they reject that method of appealing to majority at the expense of those they vilified aka the minority to further their goals. So while they rejected the democratic ideals along side modern neo-liberal and classical-liberal ideals they did not wholly reject the ideals and methods of expansionary government, governmental control and regulation of markets, over-riding of personal freedoms, etc to satisfy the majority.
No, those are the things the early socialists rejected.
Edit: As a side note. Socialist liberalism was itself divergence and splinter from the classical liberal ideas espoused by John Locke and classic liberal economists such as Ludwig von Mises which favor the individual over the majority both political in regards to rights and economically in regard to government role with the economy.
Not precisely. If you want to draw the line, you really need to start between Marx and Hegel. While not strictly precise, it is close enough and very convenient. Hegel ran as you described down the Locke track, however, Marx took dialectics, the philosophical process by which Hegel justified classical liberalism, and turned it on its head. Marx contended that classical liberalism cannot possibly embody the individual because it forcibly separates the individual from his labor.
Marx saw the world in terms of classes, the dominant groups being the capitalist class, those who owned the means of production, and the worker class, those who operated the means of production. In addition to owning the means of production, they also controlled the only source of wealth which can provide a reliable means to acquire the necessities for life. This put the workers in a coerced state wherein they must go to the capitalist class and exchange the only thing they have, their labor power. However, Marx held that the working class would never be given the full value of their labor, after all, why would the capitalist allow the worker to use the factory and get nothing out of it?
It follows logically, that only part of the time a worker works they do so for their own wages. Some of the money from the efforts of the worker must go back into profits, otherwise the capitalist has no reason to be involved. If the production of X number of widgets will pay the wages and the material costs, there must always be an additional Y number of widgets that goes back into the company and to pay the living expenses of the factory owner. Marx took this to mean that in order for an individual to be fully actualized, they would need to be both the factory worker and the factory owner. The workers needed to control the means of production in order to be free of coercion.
The reading of Marx as one who would subsume an individual to an authority is bass ackwards from what he and the early socialists intended; they viewed themselves as emancipators from all forms of external authority.
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