Your "fusion jet" idea is... ugh I don't even know where to start. You can't maintain a fusion reaction with one end open to atmosphere. You'd have to run it as a sort of heat-exchanger and use heated air as the thrust mechanism, and that would end up even less efficient than a rocket. And that's not even discussing the issue of fusion not even being energy-positive for us yet, let alone miniaturized enough to fit on a launch vehicle. You say "this is what they should be working on" as if only one thing can be done at a time. Fusion is being worked on. It's not even ready for power generation, let alone thrust generation. Researching fusion engines right now would be like researching electric cars before you've invented a generator that works.
That was called an oversimplification. What you need is a magnetic bottle where one portion of the magnetic field is weak enough to allow plasma with a high enough energy to escape, shaped to direct the thrust out the back. I generally don't like tokamak designs, but they might work better for thrust than for power generation. Alternatively, a spherical bottle or something similar could be used with lasers to ignite the fusion, like in the NIF.
In terms of power generation, people are going about it in entirely the wrong way. If you want to get power out of a reaction, you don't start with five story tall electromagnets or terawatt range lasers. The problem is, colleges are getting lots and lots of money for that kind of research, so they don't really want to look into alternatives. Two more promising designs are the Polywell and the Dense Plasma Focus. The Polywell uses ring shaped electromagnets arranged in a cubical formation. When you inject ions into it, they bounce back and forth through the exact center of the field, creating a very high particle density at that point. Much less power intensive than the Tokamak. The Dense Plasma Focus design uses a chamber filled with gas. Sound waves are fired through the chamber, creating very high densities at the peaks, so that the fusion occurs in pulses.
And did you read the article? This rocket is going to cost at least 3 billion a year. They're not gonna have any money left over for this kind of research after that.
Just let the actual scientists figure it out, ok? Being an armchair quarterback is annoying enough, being an armchair space ship designer is just... arrogant. Are you an aerospace engineer? Do you think the folks at NASA haven't spent, I don't know, decades thinking up ideas and toying around with them? Fusion is being worked on. Scramjets are being worked on.
Fusion, I've already covered. I'm hopeful that usable fusion reactors will be developed before the end of the decade, but they're not going to come from any of the big fusion research projects. Scramjets are more like a pet project. There's been a few experiments into them, but they're definitely not getting the kind of money that these rockets are going to get. If some serious money was put into them, I would expect to see results in under five years. Honestly, even ramjets could work, and that technology's been available for decades.
And no, I'm not an aerospace engineer. Just a physicist. This is, in fact, something I've put a fair amount of thought into.
The SLS is a heavy-lifter. We need a heavy-lifter to build a platform to launch interplanetary missions. That's the eventual plan: rockets to build and get to Space Station, assemble and launch interplanetary mission from Space Station. Ion drives might be the propulsion method of choice.
It'll never happen. The ISS cost something on the order of $130 billion, and it's nowhere near capable of supporting interplanetary launches. You just can't build that kind of infrastructure in orbit with chemical rockets. As for ion drives, they work fine for probes, but for people, you're gonna need something a little more powerful. Remember, the longer the voyage is going to take, the more supplies you're going to need to bring, which makes your ship heavier, and so on, and so forth. Also, if you're going to stick people in interplanetary space for months on end, you're going to need some serious cosmic ray defenses. I suppose you could manage it with a fission reactor, assuming VASIMR gets developed enough, but fusion would make things a whole lot simpler, and a whole lot less expensive.