Oh, I think quite possibly. They'd have found the ice and carbon dioxide and ammonia and other volatiles in the permanently shadowed craters at the poles. Also, the lunar caves, which may be up to 5 kilometers in diameter, and the peaks of almost eternal light at the poles, ideal for temperature and solar power.
The Moon actually looks rather favourable indeed, compared to Mars, nowadays, now that we know of those resources.
There may be hundreds of millions of tons of water ice there, and also many millions of tons of CO2 and ammonia. And the peaks of eternal light have the most continuous sunlight available on any large body in the inner solar system (apart from possibly Mercury), and they have steady temperatures, varying by only ten degrees C either way. The average temperature may seem rather chilly (at -50° C), but that's warm enough to let you keep a habitat at a comfortable temperature of 20° C with aid of a solar collector.
The caves on the Moon are also a unique resource as they have the potential to be far larger than caves on Earth or Mars due to the low gravity. Larger even than city domes.
There are many metals available also. And 0.5% of the soil is pure iron, which can be separated by a magnet. And the soil is very fertile, tested by growing plants in actual real lunar soil.
So - they wouldn't know any of this of course, but I think that if they'd continued with the explorations after Apollo 17 in this alternative past history, they'd have found it all out in the 1970s. We can never know what would have happened then, and can't say it would be a better history, but yes, I think that this might well have lead to permanent long term bases on the Moon by now.
I think it's also the obvious place to go next today.
Mars does have ice, but - if you think about melting it all - do remember that it has large areas of desert, dry for a long way down in the equatorial regions. Though there is water chemically locked in the sand, it's still as dry as our Sahara, and is not just a smooth ball. Much of the water would drain away into the desert sands. And it doesn't have much ice, compared to Earth. Not only does it have much less than the water in our oceans, it's got only a fraction of the total amount of ice in Antarctica too. It had oceans in the past, Bobody really knows what happened, but the latest evidence from the Maven spacecraft suggests that most of it was lost into space. A small amount might have ended up in the deep hydrosphere kilometers below the surface.
There is ice also in the equatorial regions of Mars, deep underground, and again we are not sure how much. I'm not at all sure you could create oceans there if you raised the temperature somehow. Also, that would need large planet scale mirrors or massive industrial levels of production of greenhouse gases, as part of a thousands of years project - and with much to go wrong. There is no way you'd change the planet over a decades long timescale or even a century or two by these methods. On Earth it took hundreds of millions of years, and that is in an orbit much closer to the sun than Mars.
The Moon at any rate has many advantages over Mars, It's much closer, far easier to supply and for rescue as well. As rich in resources as Mars I'd say, for up to thousands of people at least, and the peaks of eternal light particularly are amongst the most hospitable places you could hope for outside of Earth. The large lunar caves are an asset also. The effects of lunar gravity on humans long term is a big unknown but that's true also for Mars and you can't just draw a straight line between Earth and zero g, The human body is complex, with many interacting systems that would respond differently to different gravity levels. So, it could be that lunar gravity is better for you than Mars g, or worse, or different gravity levels may be optimal for different ages or health conditions, or there may be individual variation. There is no way to know except with experiments.
So, I think based on these recent discoveries about the Moon, which they could have discovered in the 1970s if they had kept going - you can present as good a case for near term settlement of the Moon as for Mars, and perhaps a better case, since it is so close to Earth.
So, I think yes they could have set up a Moon settlement. Not sure if you would really call it a colony as it would surely be dependent on Earth for many things. Nowhere in space is anything like as hospitable as Antarctica or our driest, coldest, harshest deserts and we don't colonize those. I think it would have been more like a settlement type base, not a colony - and not approaching self sufficiency, not yet. Like an Antarctic base, you'd have many people on Earth to support each person on the Moon. But the explorers and scientists in the base would be finding many things of value on the Moon by now, so making it worthwhile for us to support them just as we do with scientists and others in Antarctica.
For a shorter article summarizing some of the main points, see my Case For Moon - Open Ended Positive Future For Humans Based On Planetary Protection - Executive Summary
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