I see you are using Arduino 1.
The plugin is not compatible with Arduino 1. See my post on this topic in http://arduino.cc/forum/index.php/topic,81082.0.html
You should not have to edit the Arduino files. If the IDE works under OS X with these files there is no reason an eclipse plugin should have to change these files.
The only change you made that I can not explain is "I had to add "#include " to Arduino.h"
On behalf of "I am not sure why, but the plugin will not take my edits for updating the avrdude path."
Have you followed the "important notes" in my previous post?
I see you are changing things in the project settings. Normally this is not needed. If you want to change it anyway it is better to change them in project properties-> C++- general > paths and symbols. Information is stored at several locations and you may undo your changes without knowing.
I'm wondering what you provided as input to the preference screen below.
Given your input it should work if you provide "/Application/Arduino.app/Contents/Resources/Java"
Can you try to change to this settings saave the preferences reopen the preferences and take a image from the avr path settings
Delete all the project (or even the workspace) selecting delete content on disk before you do a new test.
As far as I see it should work.