Good point. John should have mentioned John Jr both because of the reasons you said and to again distract from having to tell about the nerve damage. But right now John wants to prove (to himself) that he's not helpless in spite of evidence to the contrary so he's being a bit reckless.
I forgot about that, if he would just TELL THE TEAM Felicity and/or Curtis could whip up a version of that chip for his arm.And even if Diggle didn't have the nerve damage, he's hardly skilled at archery to the level where he can become the Green Arrow. Maybe their friends at STAR labs could come up with something. Or Felicity--she should be in a wheel chair yet she has full function. Diggle could be Star City's version of Iron Man, given all the tech they have.