I agree that context is extremely important. I would take issue with some of the interpretations that you have made.
Foolish . . . wise: cf the contrasted “wise man” and “fool” of Matthew 7:24, 26 where the two are distinguished by good deeds and lack of them. Nothing to do with the status of saved versus unsaved.
Stay awake: some scholars see this command as an addition to the original parable of Matthew’s traditional material, since in Matthew 25:5 all the virgins, wise and foolish, fall asleep. But the wise virgins are adequately equipped for their task, and stay awake may mean no more than to be prepared; cf Matthew 24:42, 44.
“For just as a man who was going on a journey.” Although the comparison is not completed, the sense is clear; the kingdom of heaven is like the situation here described. Faithful use of one’s gifts will lead to participation in the fullness of the kingdom, lazy inactivity to exclusion from it.
Although the first two servants have received and doubled large sums, their faithful trading is regarded by the master as fidelity in small matters only, compared with the great responsibilities now to be given to them. The latter are unspecified. Share your master’s joy: probably the joy of the banquet of the kingdom; cf Matthew 8:11.
Wicked, lazy servant: this man’s inactivity is not negligible but seriously culpable. As punishment, he loses the gift he had received, that is now given to the first servant, whose possessions are already great. In the previous verses, it is clear that everyone has been given talents. If nothing is made of those talents, then the talent is taken away. But everyone has some talent given by God - everyone. You must read verse 29 in the context of the previous three at a minimum. Your interpretation is demonstrably wrong.
The conclusion of the discourse, which is peculiar to Matthew, portrays the final judgment that will accompany the parousia. Although often called a “parable,” it is not really such, for the only parabolic elements are the depiction of the Son of Man as a shepherd and of the righteous and the wicked as sheep and goats respectively (Matthew 25:32-33). The criterion of judgment will be the deeds of mercy that have been done for the least of Jesus’ brothers (Matthew 25:40). A difficult and important question is the identification of these least brothers. Are they all people who have suffered hunger, thirst, etc. (Matthew 25:35, 36) or a particular group of such sufferers? Scholars are divided in their response and arguments can be made for either side. But leaving aside the problem of what the traditional material that Matthew edited may have meant, it seems that a stronger case can be made for the view that in the evangelist’s sense the sufferers are Christians, probably Christian missionaries whose sufferings were brought upon them by their preaching of the gospel. The criterion of judgment for all the nations is their treatment of those who have borne to the world the message of Jesus, and this means ultimately their acceptance or rejection of Jesus himself; cf Matthew 10:40, “Whoever receives you, receives me.”
I think that this chapter says what it means - that those who show mercy will be shown mercy and those who use their talents for God will be rewarded. It is reaching too far to try to label the sheep and goats the elect and the predamned. There is no evidence. And there is too much evidence that Jesus says very clearly exactly what he means.
1Cr 3:18 Let no man deceive himself. If any man among you seemeth to be wise in this world, let him become a fool, that he may be wise.
2Ti 3:15 And that from a child thou hast known the holy scriptures, which are able to make thee wise unto salvation through faith which is in Christ Jesus.
There are may places in scripture that talks about believers being wise and the wise being foolish.
Our views on Matthew illustrates why you believe you are saved by your works and I believe that I am saved by Christ's righteousness. These views are worlds apart like the left and the right.