You and I drafted very similar teams in one of my leagues. Looks like I will finally win this week!
Again clarify if PPR and redraft or keeper (how many?)
1. I don't think you are foolish for giving up on MJD - Jags stink and he is not getting better. (Don't know if I am doing a trade for Ellington unless this is a dynasty league, then still maybe).
2. I agree with you that you need the WR upgrade. Blackmon has been great and with Jax always playing from behind he should get numbers. Gernard though does seem a rare talent and if this is a dynasty league I might want to hold onto him over Blackmon and all his troubles.
3. No don't give up on Kaep.
Personally I would try to trade MJD, Moreno, or Bernarnd for a WR1 or high end WR2. Someone like Wes Welker, Reggie Wayne, Antonio Brown, or Amendola (if you are willing to gamble)