Java has a massive inertia advantage in modding, which is pretty important in my opinion because modders are the largest playerbase that will stick with your game for a very, very long time. Additionally, modders have been known to stick to old versions of minecraft for a long time, so new features/tooling likely won't sway them. I expect the java edition to remain the most popular version for a very long time.
That whole system is really a mess, and I speak from experience as a modder. All the changes between MC releases makes updating an enormous pain in the butt, so there's still mods stuck at version 1.6.4 and every version in between.
I think most modders would be ecstatic at some kind of official mod support, assuming it offers at least what forge does already.
If you mean "new options from a different group", then yes.
If you mean "Minecraft has gotten stale and this will pep it up", then no. Minecraft has a very health and active modding community that has really been exploring new directions lately, and the non-modded Minecraft has been continuing to push new options and directions for some time.
> Is this Microsoft making an attempt to make the Java edition obsolete?
I expect they don't have to "attempt" so much as just let it decay because they'll have a lot more non-Java resources. As much as I've trashed MS in the past and as much as I thought the Minecraft buyout would be bad for Minecraft, MS has really been a decently-behaved corp citizen in software of late and developments like this mean that while they might under-support the Java Edition, they'll continue to support Minecraft in some form as we've come to expect.