THOSE Ultra Orthodox are not the ones you are thinking about, they are real ultra religious people that actually goes to Yeshiva's and study the bible or whatever they study there.
They’re settling on disputed lands and slowly pushing out Palestinians. Who is defending them at all times? Israeli soldiers who are not Ultra Ortodox. I think it’s good to give them a taste of conscription, all other Israelis do it, male, female, no exceptions. They are the exception.
Not those Ultra Orthodoxes. They are mostly located in undisputed places like Bnei Brak, Jerusalem, Harish or Bet Shemesh.
Religious settlers tend to serve in the army, although sometimes for a shorter period (in a Yeshivat Hesder).
Having said that, the ruling is just and make sense.
That is incorrect there are quite large Jewish orthodox cities inside Palestinian territories Like Elad and Beitar Elit. They are quite big. However they are relatively close to the Israeli border and not 'in your face' settlements.