You are 100% correct regarding the the issue of getting absentee ballots out to military personnel. Indeed, the 1985 change to the New Jersey law, which extended the time from 34 days to 51 days wherein no changes could be made on the ballot was in response the requirements of the Federal law. The NJ Supreme Court completely overlooked (or completely disregarded) that aspect of the legislative history.
If the Federal Courts are going to issue a stay to the NJ State Supreme Court, it will certainly be about this issue.
I also have to wonder about something else in the NJSC scheme. We all know that ballots have been returned with votes on them to various counties in NJ. We all also know it is illegal for a voter to vote twice in the same election. If the state resends out ballots to people who have already voted, aren't they in effect telling these people to break the law?