I have no idea what happened with Shortell and Michigan, but Michigan was looking pretty hard to add a QB to their class at that time (late January). They eventually added Russell Bellomy who was a Purdue recruit (other BCS offers were Iowa St., Minnesota, Colorado and Purdue (also Boise St.)) and ranked similarily to Max Shortell.
Like you said, Shortell only had us as a BCS offer, but he did commit pretty quickly. Like Phil Nelson, I'd have a hard time believing that no other BCS program would have offered Nelson (or the Olson brothers) if they didn't commit so early.
That said, I have no idea if Michigan preferred Bellomy over Shortell, or if they would have been interested in either (first to commit sort of thing).