This study presents a detailed numerical analysis of nonlinear aeroelastic behavior in a two degree of freedom (DOF) model, focusing on plunge and pitch motions and employing the continuation method (CM) with an adaptive step size control algorithm. The research incorporates free-play nonlinearity at the plunge hinge, a common structural nonlinearity in aeronautics that can induce detrimental limit cycle oscillations (LCOs) during flight. By examining three scenarios—linear response, unhindered plunge motion, and nonlinear stiffness behavior—the study assesses the effects of free play on flutter and LCO phenomena, including discontinuity-induced bifurcations like grazing bifurcation. Additionally, the study explores parameter variation for nonlinear flutter analysis, revealing the dynamics of grazing bifurcation and its impact on LCO behavior. The research also demonstrates the method’s superior accuracy in flutter speed estimation and mode-switching identification, despite higher computational demands. The findings underscore the diminishing influence of nonlinear free-play behavior on LCO amplitude, providing insights with significant implications for aeroelastic design and aircraft safety.