Yes. The PA 32 warning was only if you ride along the river towards L'Ville. The NJ side is much safer. I don't even like to ride the 3 or so miles from Dogwood Haven Campground to the next river crossing into Frenchtown. Even when traffic is light on PA 32 I always seem to get buzzed. I backtrack from there and cross back into Milford. Milford to Frenchtown can have some moderate traffic at times, but there is a decent enough shoulder. Not so on PA 32.
As for CR 579, there aren't many options if you want to go into the interior of that part. Any time you get away from the river in that area you are stuck with climbing. That's just the way Hunterdon County is.
I just noticed that your route has you going NE just to head back SE. I assume you did that to avoid some climbing. Here is a work in progress that I have been planning:
PA NORTHERN TIER-PINE CREEK - Union City, Penna
It uses some of Route Y. I only mapped as far as Dogwood Haven since I know the rest by heart.
Here is the portion from Erie to Route Y at Union City:
ERIE-UNION CITY - A bike ride in Erie County, Penna
The route uses the Pine Creek, Lehigh Gorge and part of the D&L trail system. (The Lehigh Gorge Trail is actually part of the D&L system.) I know you have reservations about riding on unpaved trails, but it might be useful to have something like this in your back pocket in case there has not been much rain. It certainly would eliminate a good deal of climbing and keep you off PA 115, which can be very busy in places. There is a decent amount of camping along the way. It probably doesn't fit with your WarmShowers plans, but again I am just throwing it out there as an option. Personally, I love to camp and cook, and if I am going to be carrying all that stuff I want to use it.