You're absolutely correct. My pessimism got the better of me in assuming that this noise had to be the worst possible problem. So I took the wheel apart as far as I dared. I've never repacked bearings, so I didn't pull the axle out. In the end the noise was from the fact that both nuts on the brake cable adjuster were on top of the holder (don't think that's the right term, but you know what I mean if you've seen it). Therefore this piece wasn't actually fastened to anything. It was just flopping around in there. It took all I had to break these two nuts apart, don't know who decided take the shortcut of not actually fastening this thing. But I did verify that when I applied my break the cable tightened up to the point that the adjuster was actually tight in that holder...aka no noise.
I did end up learning a lot about that wheel, got to see the brakes (good to inspect them anyway) and how they worked, and did remove some play in the end I believe, which I'm sure was a good thing.
Thanks again everyone.