i hav close family member to went to Jerusalem before, i can more or less answer some of your questions.

MY doesn't recognize Israel as a state, but recognize palestitne as a state.
so u basically say u go visit palestine, not israel, problem averted on paper?

secondly, the restriction less about not letting m'sia passport holder travel there, rather more on to stop israelis from entering MY.

that's all on paper only, in actual practice, thr loophole into Jerusalem is to land on ajacent country, then enter via land route, like open smuggling.
for religious purposes, they will let u in, but u hav to proof u are from that religion.

once in there, u do what the tour guide says, dont step out of line.
coz if u get in trouble, no no MY embassy to save u.

of coz got risk involve.
if a war broke out while u're in there, border closed, u're in for trouble.