Jeff, I think you got it right. The reason it is not a ground loop is that the only place the ground occurs is the shield of the cable. Without that connection to the arm, the arm would be floating and it would buzz like crazy!
This concept is common to nearly all tonearms BTW (including BSRs from the 1960s). Since the arm is a separate ground circuit from the cartridge wiring, it is also why tone arms are or can be a balanced source.
This concept is common to nearly all tonearms BTW (including BSRs from the 1960s). Since the arm is a separate ground circuit from the cartridge wiring, it is also why tone arms are or can be a balanced source.