I guess I don't know how things are done in Reno. I was expecting that basements were not common there. They seem to be fairly rare in AZ and Calif. Is there no floor drain in that basement?
Penetrations of a line to the city sewer is commonly done for "overhead sewers". In that case, basement loads are pumped up to the overhead sewer above ground level. The purpose is to avoid city sewer backups into the basement. It is effective. Your idea of putting in the grinder pump to feed up to the higher sewer is good for preventing backups if there is no floor drain, in addition to getting rid of that elevated floor.
Since you have no pump already, I guess that was not the case. Perhaps the wall penetration method was to avoid digging. If it was laundry tub drain put in during original construction, I would have expected the pipe to be 2 inch pipe. If it is 3 inches or bigger, I would suspect it was put in to serve the toilet. But I could easily be mistaken-- maybe 2 inch lines out to the sewer are not permitted.
I am not a plumber. I cannot say how to treat the line that you want to deactivate, but I might be tempted to turn it into a cleanout.