To be fair, I expect a lot of those "Ottoman descendants" are Mizrahi who immigrated after Israel was established, not before. The Law of Return is controversial for such reasons. All your other notes are pertinent, but I fear any more scrutiny on this subject is pointless. The outstanding issue is the contemporary stateless nature of the West Bank and Palestinians under Israeli control. Any references that go further back than say... 40-50 years, are irredentism or fringe justifications because the claimants cannot find a substantive one.
That's not how I would describe the situation under Ottomans, but I don't think it's relevant anyway. There is obvious racism against Arab Israelis, but considering their neighbors, the tensions, right-wing rule of several decades, Arabs still have representation, basic rights, and aren't subject to an ethnic cleansing. One could make comparisons to African Americans, but the historical and cultural contexts are obviously very different. Yeah Israel gets some kudos, as many kudos as you can give for being a " human being that does the bare minimum to avoid violating civil rights in an overt way".
If some Israelis consider that a high bar because "what about other countries", then whatever. I'm not particularly impressed.
The larger issue is the slow annexation of Palestinian territory, the fact that Palestine is essentially run by UNRWA, while being subject to martial law executed by Israel, with no real leadership existing. And Israel is perfectly fine with letting this absurdity happening because it suits the political agenda of major parties.