Nick316,
Wikipedia is a seriously bad place to go to gain understanding about these complicated matters. And a quick reply will hurt you more than help you.
Judaism is widely believed to have begun after the Babylonian exile (after 539 BCE) when people who were originally from Judah began returning to their land under Persian protection. It was believed by some people, and by Ezra in particular, who was the official person in charge, that the people needed to distinguish themselves by building ethnic and religious boundaries around themselves. So he instigated what was, apparently, a very unpopular decree: any male of the people of Judah who had married a foreign wife and/or had children by a foreign wife, must divorce that wife and send her and/or the children away. Ezra was also, apparently, in charge of making sure that the people followed their ancestral laws. So he brought and/or assembled the Law and then made sure the people knew it and followed it. This is the beginning of Judaism as we know it and the first time that people were called Jews.
The Wiki article you quote from is horrible. Truly. I'll try to clear up some things for you:
Evidences found in the Canaanite city of Ugarit suggests the ancient Israelites
First of all, Ugarit isn't Canaanite. It has nothing to do with the Canaanites of the bible. It is located north of Canaanite territory on the Syrian coast, above Tyre and Sidon, quite close to what is now modern-day Turkey. Second, no evidence from Ugarit suggests ANYTHING about the ancient Israelites. Not only are there no references anywhere to Israelites in Ugaritic literature, but by the time the Israelites became a recognized people, Ugarit was just about to be wiped off the face of the earth. Ugarit is helpful because it provides us with mythic literature that probably represented stories that people like the Canaanites knew and because the language used by those texts is extremely old and extremely similar to ancient Hebrew, so it helps us understand the Hebrew language better. The only other real piece of evidence we have about ancient Canaanite belief comes from much later (a couple hundred years before Christ) as recorded by people like Hecataeus, Berossus, and Manetho, at which point the Canaanites didn't exit anymore. Aside from the biblical texts and the Dead Sea Scrolls, the things that help us understand about ancient Israelites are few and far between. Some of them are the Elphantine papyri, the Arad Ostraca, and the Samaria Ostraca.
ancient Israelites practiced a polytheistic North-west Semitic religion
One of the issues that many biblical texts tell us again and again is how the people worshiped many gods and/or gods other than YHWH. The prophets were continually trying to tell the people to stop serving gods other than YHWH. It was the PRIMARY belief of ancient peoples that there were numerous gods. The one Egyptian pharaoh who tried to make his people serve and worship one single god, failed utterly. This is not a problemthis is a reality of the ancient world. Israelite literature is unique in that it focuses on a single godYHWHabove all others. That is what makes it so incredible. The biblical texts should have been snuffed out of existence over time because they flew in the face of everything everyone believed. But somehow they survived--and they survived better than almost anything else. Almost any other text older than the biblical texts are texts that we have had to dig up out of the ground because they have been forgotten or lost. No one had to dig up Genesis or Isaiah or Proverbs. We've had them all along.
Yahweh was associated with El, and became the "national god" of the Hebrews.
Just as ancient Canaanites believed in a superior, ultimate, main deity, so did the ancient Israelites. Many ancient Israelites probably came from the Canaanite peoples just like Abraham came from other polytheistic peoples. The name of that highest god among Israelites was YHWH. Sometimes El was used because that name represented the highest god among Canaanites and many Israelites came from a background that was familiar with El. It doesn't mean that the Canaanite god El and the Israelite god YHWH were the same. It just means that the people used the names they felt most comfortable with. The two deities were very different, even if some of the ideas about El and YHWH were the same. Kind of like talking about the Islamic god Allah and the Judeo-Christian god YHWH. They share some characteristics, but they are different gods.
There is some evidence of a god "YW" who was the Son of El
I've been studying these things for years and I've never heard of this. If it is true, it is likely an idea that was presented once by a single scholar and has been disregarded by the rest because the evidence it depends on is highly uncertain or simply wrong.