You're right that they only say "ally" because it's far from clear that they actually ARE our ally.
But the Saudi government does cooperate with the US on a lot of things. They're often the targets of the same terrorists that we are. Their intelligence agencies coordinate with ours, and provide a lot of the information that goes into the US "war on terror".
The problem is that the Saudi "government" is a weird thing. It's a kingdom with literally thousands of princes. Many of whom are insanely wealthy, and some of whom actually support terrorism, including terrorism against their own country. That's not an "official" policy, but neither does the Saudi kingdom go out of its way to arrest them, either. Why exactly those princes support violence against their own country and their own family, biting the hand that feeds them caviar... well, let's just say It's Complicated. But they do.
So they say "our ally Saudi Arabia" because it is our ally... often against itself, which is our enemy and its own.
It's even more complicated by the fact of oil; for decades we relied crucially on them. And that's growing more complicated as our dependence grows less. So we're less willing to put up with the support for terrorism, within the family and within the government. We do, in fact, need their help, and simply trying to prosecute Saudi family members (if not the government itself) will make that complicated situation even more ridiculous.
So... I got no idea where we go from here. I see the threat to sell bonds as a really weak threat. The fact that they have those bonds was, in fact, a favor to us, helping prop us up during the economic crisis. But we don't really need that any more; plenty of people are still desperate to buy our bonds. The price of oil has collapsed their cartel.
The government wanted to be our friends, but not at the cost of loosening its own power. Now that's failing, and their options are few. I dunno what happens from here. Those 28 pages won't have nearly the "smoking gun" that people imagine it will, but they won't be pretty either.