I'm a little confused about something. I want to exclude certain items from spawning anywhere. So, would I set "Force Custom Loot Tables for Default Loot on all Containers" to true and then adjust the MagicLoot.json in the data folder, setting what items I don't want to spawn to 0?

You actually don't need to set custom loot, just set to 0 on the data folder and it wont spawn