The main question: is Valvoline Max Life a suitable transmission fluid for a Volvo XC70? And if it isn't, would it cause a sharp uptick in slippage?

I have a 2001 Volvo V70 XC with about 150,000 miles on it. A few months ago, the check engine light came on, though at the time I assumed it had to do with emissions, since I'd just replaced another emissions part a month before. A couple months later, coming back from a two hour highway drive in what passes for summer in Northern Minnesota, the transmission service required warning came on, and the vehicle dropped into limp home mode.

Until it did that, it showed no notable change in shifting or performance, and hadn't given me any cause for concern over the drive. I sidelined it until I had time to work on it, pulled the trouble codes, and received a P0740. Based on what I saw on here, and other forums, it looked like dirty, or old transmission fluid was the cheap repair to start with.

So, my father did his own research, and bought Valvoline transmission fluid. The part number that kicks out as being the right fluid is shown on the back of the bottle. He did the flush, per what we'd read on here, and in Youtube videos, and he got fluid back that matched the color of the new fluid. The fluid wasn't overly dark and didn't smell burned.

I drove it about 50 miles around the area, noticing small slips and delays which hadn't been there before. Then I drove it to work in the rain. It wouldn't stay in high gear, kept downshifting, and then dropped into limp home mode again.
I haven't moved it since.

Is it possible that incorrect transmission fluid is making the problem worse? Or did the rain make something more obvious?

Does this cascade of problems sound like a transmission failure, or could replacing the valve body or solenoids be a viable solution?

None of the transmission shops I can reach/have it towed to will touch it, so if its going to be fixed, its my hands that are going to do it.

Any suggestions?