I'm far, far from my Arduino, so I can't try it.
Have you tried using an alternate terminator and testing for it instead of testing for CR/LF ?
My sketch does not wait 5 ms and exit readSerialString. readSerialString is only called when I press enter through the Serial Monitor
What's this then?
delay(5); // for whatever reason, Arduino needs this or read doesn't finish
"readSerialString" is probably called thousands of times, but there's nothing in your code to indicate it is only called when you hit "enter".
there is no trapping for exit characters and yet the functions work, theory be darned.
They wouldn't work if you were using hyperterm, or anything but the serial monitor, I'd put good money on it.