@kajsa.anderson and others:
I found the issue!
Above, Jesse showed checking out the Arduino-Boards repo to hardware/avr/keyboardio, but in his follow up, algernon shows hardware/keyboardio/avr (Note the different nesting order of the avr and the keyboardio directories.)
After…
- doing a fresh clone of the
Arduino-Boardsrepo with thehardware/keyboardio/avrdirectory structure - restarting the Arudino IDE
- selecting the “Keyboardio Model 01” board in Tools > Board… (It had reverted to an generic arduino board)
…I no longer get the missing ‘arduino:arduino’ core error and was to able successfully run Verify/Compile. Simply renaming the directories so they are in the correct nesting order would likely work. I just did a fresh clone to have as “clean” a redo as possible when trying it.
I checked and the Model01-Firmware README does have the correct path. While I did RTFM, I did not pickup on the variance between it and what was posted above 
Hopefully, @kajsa.anderson, your issue is the same. 