Surely it isn't that simple...

[simox]

Now, if I were to change the highlighted portions from 'locked-item' to standard-item' and then copy it back to the phone, would that make the buttons configurable?

Again, if I were to change 'false' to 'true', would I be able to delete these demos?

Yes, but you need to do a master reset after modifying it.

Another way is to upload a customize_upgrade.xml to /tpa/preset/custom/ folder. The customize_upgrade.xml will contain the modifyed parts. Example:

<?xml version="1.0" encoding="UTF-8"?>
<customization>
 <mmi>
  <shortcuts>
   <shortcut>
    <key id="nav-up">
     <name>JumpPage</name> 
     <state>activated</state> 
     <action-type>short-press</action-type> 
     <type>standard-item</type> 
    </key>
   </shortcut>
  </shortcuts>   
 </mmi>
</customization>

In this case just turn on the phone, and problem solved.