I must be the exception to the rule.
Setting religion aside, if my next-door neighbor was having 20-50 people over to his house on a twice-weekly basis for any reason, I'd likely not be very happy with him. Just dealing with the added traffic would be a problem. Zoning rules generally exist for a purpose. As a previous poster noted, there's a reason why you can't open a Starbucks in your garage.
I've no knowledge of the situation beyond what I've read here, but it sounds to me like a problem caused by two (maybe more) hard-headed neighbors and complicated by a bunch of empty headed bureaucrats. Seems that a simple solution would be for this religious service to meet at a public place (church? town hall? library? public park?) and call it "resolved".
That having been said, the law in question specifically mentioning "religion" needs to be changed. That's a problem, no doubt.
Better yet, what if a college fraternity moves into the house next to the “home church”. I wonder what the owners of the home church will do?
“Hey there are zoning decrees against fraternal meetings here”.
That probably would be the best resolution all around. if they want to be a church so badly, then let them just start one, find a storefront, etc.