I tried my hand at experimental archaeology. 
I hammered this nail out to a thin point, then sharpened it on an axe stone to an edge that will (barely) cut paper.
Time elapsed, approx 5 minutes for forging and 2 minutes for sharpening.
Notes:
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The nail is probably mild steel, so similar in hardness to the low end of the hardness range for iron.
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I didn’t have a suitable rock, so I used a ball peen hammer on a metal anvil. This certainly made it easier and faster, but I think the cold forging principle holds.
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The iron in the video is probably so full of impurities that it could be anything from iron to mild steel (0.1% carbon or so), to cast iron (maybe 5% carbon), even in the same blade, so it’s hard to say how it would behave. As you point out, cast iron is much too brittle for forging, but pure iron is quite ductile and workable. Forging actually increases hardness and tensile strength.
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Whatever the result, the process is obviously extremely tedious, all to produce a knife inferior to one that an experienced flint knapper could turn out in minutes. As you say, the practical use of iron had to wait for a higher level of technology, with bronze as an intermediate step.
