There are plenty of fabricated stories around this time. Blood libels, like conspiracy theories, need to have some element that can resonate. If they are obvious complete fabrications then they're not going to work. Around the times where people were telling stories of Jews using the blood of children for Seder there was a culture and atmosphere where people believed that.

The dictionary says of Apartheid "(in South Africa) a policy or system of segregation or discrimination on grounds of race. segregation on grounds other than race."

Israel does not segregate based on race or anything else. There is no such observable reality. Palestinians or Arabs (if that's even a race or an ethnic group) serve in the IDF, they work in tech, they are judges in courts, they are members of Parliament. Many of them are advocates for Israel. Your "observable" reality doesn't exist.

Israel does not treat Palestinians living in the occupied territories the same as Israeli citizens. That is the observable reality. That is also not Apartheid at all. The use of this word is absolutely a fabricated story. The story of the occupied territories can't be summed out in one sentence but is not a racial (or ethnic or any other) segregation story at all. A Palestinian from the west bank who is legally in Israel isn't "segregated" from any activity or location (e.g.). Blacks in the USA are arguably treated worse than Arabs in Israel. Palestinians aren't even segregated in the west bank or Gaza. There is no accepted definition of the word Apartheid that fits the fabrication. The restrictions on local population that is under occupation has never been called Apartheid in history.

I don't think you really know the ultra-orthodox Jewish communities. Some of them are anti-Zionists and are marching and camping with Palestinians. Some of them live in their own world of Torah studies and couldn't care less about current events. And yes, some of them participate in Israel politics (and society btw, not necessarily as isolated as you suggest) and are part of the government to help their constituents not serve in the IDF and get funded by the state. The attacks against ultra-orthodox relate to them being visibly Jewish, that's about it. That's just pure antisemitism and trying to paint them as "extremists" is to be honest also antisemitism. It's like saying the Amish are extremists (I think those guys do get some hate as well).

EDIT: To expand on the Apartheid thing. The word conjures some very specific images to those that hear it and are familiar with things like South Africa or the segregation against blacks in the US. None of those images apply to Israel. There's no "blacks sit in the back of the bus", "blacks can't be members of this club", "black can't stay in this hotel", "blacks live in their own neighbourhoods". None of that. The situation in Israel is quite unique. OTOH there are many countries with actual racial/ethnic discrimination (like China/Tibetians or Russia/Chechens or Qatar) where nobody cares.

Israel basically has two or three options with respect to the occupied territories. It can annex them and give everyone equal rights. A move that the international community will likely not accept (e.g. see the Golan heights). The Palestinians will also not accept that since they demand the right of return for refugees living outside the region and they have no wish to become Israeli citizens. E.g. many Palestinians in East Jerusalem who have the option to become Israeli citizens refuse to do so. The Israelis are also afraid they will lose the Jewish majority in the resulting "democracy" (though some Israelis consider this a workable solution). It can withdraw from them unilaterally. Another move the international community or the Palestinians will not accept (e.g. see Gaza). Or it can try to reach some sort of settlement (e.g. see the failed Oslo Accords). Most Palestinians demand that Israel cease to exist and Israelis "Go back to Europe" (which is a cute story but also disconnected from any reality).

So basically no options but to perpetuate the current situation. The current reality of wars, violence, right wing government, religion etc. is simply overlaid on top of this problem with no solution. Even if you didn't have a right wing government in Israel and you didn't have a war in Gaza there's still no solution (and we've been there before) and there's still violence.