Beretta,
You ran up against a skiddish dealer, plain and simple. When attempting an interstate xfer involving a restrictive state, some(most) dealers go Nancy Reagan on you(Just Say No!). The dealer is required to not only follow laws of the state where transaction occurs, but the state of the tranferee residency(I have heard this both ways), in addition to any fed law. Since the FFL does not live in NJ or know NJ laws, they usually shy away. If you know how troubled FFL's are by gov agencies, you should understand. Interstate transfers are legal, just scary for an FFL when NJ, CA, etc are involved.
Your transaction has nothing to do US Constitution; "powers not given to fed gov shall be given to each state..." This means each state sets it own laws if not directly given to federal gov; i.e. gun laws, speed limits, criminal law, etc. Some states have no residency requirement for firearms transactions(Vermont). Some have very restrictive laws (NJ, CA, NY, et al and growing).
I believe he was incorrect concerning his ability to perform the transfer, at least the reason provided; however, considering the penalty to him for an error, any FFL that likes to continue being an FFL would likely err on the side of caution, as he did. Also remember he is an employee at a big box store, not a gun shop; being a firearms seller is just a part of his job, the one part he could go to jail for screwing up. Further to the side of caution, and shooting not being his hobby, he doesn't know much outside of the checklist under the glass.
I have been told any "alteration" has to be made prior to shipping to the FFL; the change and transfer can't be done by the same person, but I don't think mags qualify as an alteration.
Switchblade- when you hand him a driver's license for the ID check, he'll know your state of residence. I don't know a way around that, but it seems some of the responses from people in more free states is with a lot more shock and dismay than from us in the less free states. We see it all the time, just find a way to get it done, but don't expect it in any big hurry
PS- Calabrese, Florentine? Am I uneducated or out of my area?