why did johnny call jake a "k*ke"?

He was basically a self loathing Jew. However, above his swastica tattoo he also had a tattoo of Hebrew writing. The real life family this movie was based on were also Jewish.

I was actually going to write how the filmmakers went out of our way to make sure the viewers knew that Jake and his family were Jewish, but I guess it wasn't as obvious as I thought. I don't know if Jake was a self loathing Jew or just a complete idiot who thought that being a Jew with Nazi tattoos somehow made him seem badass. But whichever reason it was, there was no question he was Jewish. In addition to having a Hebrew tattoo on his chest, there's a scene during the opening credits where flashbacks are being shown and one of them is a boy dressed for his bar mitzvah. I believe this is supposed to be Zack, because when one of those news magazines did a story about the case years before the movie came out, they showed some video from the Bar mitzvah of Nick Markowitz, the boy that Zack's character is based on. And in one scene that takes place inside the parents' home, a large menorah is featured prominently in the background.

No the intro has nothing to do with the characters, just some old videos of the actors as kids. The bar mitzvah was actually the real life bar mitzvah of ben foster (jake mazursky).