KJ,
1. According to both Rav Kook and Rav Soloveichik there are two aspects to are Israeliteness (I am deliberately not using “nationhood” as Rav Saadia Gaon did not write in English but in Arabic and as I do not know Arabic I cannot comment on the translation). There is the religious aspect (Berit Chorev, which is dependent on choice) and the national aspect (the Berit ben haBeitarim, which is not dependant on choice).
2. Why should Sereni have been embarassed? Rav Meir Simcha says that if a Jew thinks that Berlin (or Washington Hts. or Boro Park) is his Jerusalem the other nations will inform him that it is not.
3. Do you omit the beracha asking Hashem to bring us back to EY?