Andrew, I was genuinely surprised to see you write this:

‘To be honest, I really don’t understand how people reach the conclusion that ‘Babylon the great’ is a symbol of Jerusalem rather than of the current pagan oppressor of the people of God.’

Do you really not understand how some come to that conclusion? Rev 11:7-8 refers to Jerusalem as Sodom and Egypt. (Cf. the great city of Rev. 17:18)So, there is clearly no problem with positing Israel as the enemy of God. I think we even see this in Mt. 24-25, where Jesus takes events associated with the enemy and shows how they applied to Israel at the time. There is an obvious irony there.

Incidentally, I think closer attention could be paid to the idea that in the first century it’s difficult to separate Israel and Rome. Perhaps there is a sense in which the beast or Rome-Israel eats itself.