Good points, especially about the verse in James. My own view has always been that salvation is indeed through faith alone and that the good works referenced by James are the fruit of that salvation, ie, if you have the Holy Spirit in your heart it is expressed through the ways you interact with the world, your "works". So the works are the effect of being saved, not the cause. That said, I think God absolutely wants us to do good works, but not to earn tokens that get us to heaven but as a reflection of the relationship we have with Him.
Also, I think that Christians have by and large sorted things out between more traditional "high church" denominations such as Episcopalians and "low church" reformist denominations like Baptists. This of course only applies to Protestantism, and American Protestantism at that, I'm not knowledgeable enough about denominational relationships in other countries to venture an opinion. Still, to get that sort of relationship with Judaism earlier than OTL would require, in my very humble opinion, some galvanizing event or group which would unite the two religions in their commonalities rather than their differences.