Kathy would not likely have been able to tell if she was pregnant after merely two weeks, unless she had taken a pregnancy-test after a missed period. However, her blackmail scheme relies more on playing with her marks' emotions than on arguments based on solid logic.
With DNA testing, Kathy Cumberland wouldn't have had a leg to stand on. However, this technology was not widely known in the 1970s, so it is plausible that all the characters overlooked it, much as the show writers apparently did.