You should investigate very thoroughly the Israel/Mary point. It is more than interesting. It is disturbing. Also, there is quite a bit in the OT (more than you may realize) that Roman Catholics try to apply to their understanding of Mary’s place in theology and worship. Their methodology is strikingly similar to that of dispensationalism’s efforts with Israel. The reason this is so has to do with Christology. Both RC’s and dispensationalists fail to appreciate the full force of Jesus’ statement that the whole of OT testifies of Him. The Old Testament is not Israel’s book, it is Christ’s.
In regard to “replacement theology,” I reject the term itself. To accept it uncritically is to accept a false framing of the issues.
In regard to God’s grace and justification, you are right. But in regard to sanctification you are not. Have you actually read Luther on the subject? I think not. Finally, if you are serious in saying Jesus Christ is everything to you and if you are serious about the study of Scripture, I would recommend that you read Martin Chemnitz’ (he is the chief author of the Formula of Concord) The Two Natures in Christ (readily available from Concordia Publishing House). It is not light reading. But you will benefit greatly from it. For the Christian all theology really is Christology.
BTW It's been a while, does the Book of Concord talk much about the end times we are in? I forget.