You are correct that your feudal system is not a capitalist one, as the blacksmith does not own (he is not able to sell) his means of production.

The most underlying and critical point of capitalism is an individual's right of access to the market All this class distinction stuff are part of Marx's inane ramblings

This is not the case. The Wikipedia definition for capitalism is well cited.

Then knock out the front wall of your home, put up a sign, and boom - you're now part of this magical "class" of business owners.

Yes, there is absolutely the ability to move between classes. The use of classes in the context of this definition of capitalism is to give a broad overview of how a capitalist society is structured. In your example, owning the house and stock they sell would be considered "capital". If they were to employ an assistant, to tidy up or help sell stock (which the assistant doesn't own) then the assistant would not own their means of production. Making the assistant a "worker".

Some people even just set up tables outside their house and sell whatever they happen to like making or growing. And this isn't some vague ideal. In many nations throughout the world today this is still very much the reality, and it's awesome.

But it's not capitalism. Hence the definition I provided.

Returning to this bit:

All this class distinction stuff are part of Marx's inane ramblings.

I think shows your true colours. Economists might respectfully disagree with Marx or his ideas, but to call them inane is just ignorance.