You do need to register for state and federal tax id numbers.
Here is the info for NJ:
http://www.state.nj.us/treasury/taxa...ales/anj11.pdf
I didn't read to see if NJ charges a fee to register. I pay an annual fee for my LLC registration, but I can't remember if that is connected or required for my state sales tax id. The Fed is free.
You are required to collect tax from customers in NJ.
I asked my retired lawyer dad about liability insurance and if you would be at risk. His response was, "Potentially." As you wrote, your grandmother had to have it for her ceramics. You can thank a lawyer.
I hope you can find someone at the business center to give you free legal advice.