In a sense, there "aren't enough" unit quaternions to describe translations. Let me try to make this more precise, if not completely rigorous.
Conventionally, we can describe rotations using the set of unit quaternions
$H = \{a+bi+cj+dk: a,b,c,d\in\mathbb{R}, a^2+b^2+c^2+d^2=1\}$; each such quaternion can be written in the form $\cos(\frac\alpha 2) + \sin(\frac\alpha 2)(xi + yj + zk)$, representing a rotation by angle $\alpha$ around the axis given by $(x,y,z)$.
Just as the unit circle in $\mathbb{R}^2$ is described by the equation $a^2+b^2=1$, and the unit sphere in $\mathbb{R}^3$ is described by the equation $a^2+b^2+c^2=1$, the above description of $H$ identifies it as the unit hypersphere in $\mathbb{R}^4$. It is thus a compact space, which means that it is "small" in a certain precise sense. As a consequence of this, if you choose any sequence of unit quaternions, then it will have a convergent subsequence - that is, you can throw out enough points from that original sequence and thereby obtain a sequence which converges to a unit quaternion.
Now suppose we choose a way to describe rotations and/or translations by means of unit quaternions. This means that to each quaternion $q$ we associate a rotation or translation $f(q)$. In order to be useful for computation, this association should be a homomorphism: it should satisfy the rule $f(q_1q_2) = f(q_1)\circ f(q_2)$. This ensures that $f$ relates the multiplication of quaternions to the composition of transformations, which is what we usually mean by the quaternions "describing" a set of transformations.
This map $f$ should also be continuous: if $q_1,q_2,\ldots$ is a sequence of unit quaternions which converges to some unit quaternion $q$, then the sequence $f(q_1),f(q_2),\ldots$ should converge to $f(q)$. We impose this continuity condition to avoid strange behaviour, and because in practice just about any reasonable $f$ you can come up with will be continuous.
I claim that no matter how you choose such an $f$, it cannot produce any translation. On the contrary, suppose that we had some $q$ such that $f(q)$ is a translation. Precisely, suppose that $f(q)$ is the translation "add $v$" where $v$ is some nonzero vector in $\mathbb{R}^3$. Since $f$ is a homomorphism, it follows that $f(q^2)$ is the translation "add $v$, then add $v$ again", i.e. "add $2v$". Likewise, for any $n>0$ we have that $f(q^n)$ is the translation "add $nv$".
Consider the sequence $q,q^2,q^3,\ldots$ of unit quaternions. Since $H$ is compact, there are positive integers $n_1< n_2< n_3\cdots$ such that the sequence $q^{n_1}, q^{n_2}, q^{n_3}, \ldots$ converges to a unit quaternion $\bar q$.
Now since $f$ is continuous, it follows that the sequence "add $n_1v$", "add $n_2v$", "add $n_3v$", $\ldots$ converges to $f(\bar q)$, which is some transformation of $\mathbb{R}^3$. But this sequence can't possibly converge to anything, because the sequence of vectors $n_1v,n_2v,\ldots$ shoots off to infinity and so the corresponding sequence of translations does, too. By this contradiction, we conclude that $f(q)$ could not have been a translation.
The space of unit quaternions is isomorphic to $SO(3)$ (the space of possible rotations in 3D space), plus a double cover (which is not important in this context). It's easier to picture a sphere for visualization purposes, though. Now imagine you want to change the quaternion vector (which is a vector from the origin to the surface of the (hyper-)sphere). Since you want to keep the length of the vector the same, you have to move it orthogonally to its direction (for a sphere, this means up/down and left/right, but not in/out of the sphere). Thus, you need a vector whose dot product with the $orientation$ quaternion is zero.
But pure imaginary quaternions are orthogonal to pure real ones, and the real axis represents the identity rotation (no rotation at all). Additionally, if $q_1$ and $q_2$ are quaternions, $u$ is a unit quaternion, and $q_1\cdot q_2=0$, then $(q_1u)\cdot(q_2u)=0$ as well (this is because under the interpretation of quaternions as rotations, they are isometries, so they preserve distance and angles), so $orientation\cdot (q_i\ orientation)=0$, if $q_i$ is any pure-imaginary quaternion.
It's a bit more work that the specific choice $q_i=\frac{\Delta t}2(\omega_x{\bf i}+\omega_y{\bf j}+\omega_z{\bf k})$ gives you the amount and axis of rotation you want in your mapping from quaternions to actual rotations, but accepting that, the sum $orientation+(q_i\ orientation)$ gives you a new vector, which is the same length as the old one (to first order), but pointing in a different direction, which is what you wanted. Since there is a second order term that will tend to increase the distance to the the center (which should be intuitively obvious; imagine moving tangent to a sphere from a point on the surface—you stay near the surface for a while, but as you continue straight, you will drift away from the surface), you presumably want a step after those shown to renormalize the vector back onto the sphere.
The answer I just gave is more a programmer's answer than a mathematician's, since your question seemed quite concrete and grounded in some numerical computation. That said, the math angle here has to do with the isomorphism from the space of unit quaternions to the group $\operatorname{Spin}(3)$, which is the simply connected double cover of $SO(3)$ (as I mentioned. Moreover, the Lie algebra $\mathfrak{so}(3)$ generated by (either of) these groups is exactly the space of skew-symmetric $3\times3$ matrices $[\omega]_\times$ for all possible 3-vectors $\omega$, which is exactly what you are doing with your own angular velocity vector. (Note that $[\omega]_\times$ is the 3D Hodge star, defined here.)
Best Answer
Quaternions are an extension of complex numbers and, as for complex numbers, the magnitude or modulus is the "length" of the quaternion measured from the "origin".
You can also think to quaternions as vectors in a $4-$D space and the modulus of the quaternion is the modulus of the corresponding vector.
Also, the modulus of a quaternion is used to express the quaternion in polar form (in a similar way as complex numbers), as you can see here.
An introduction to quaternion with geometric application and more references is here.