Did figure out that if tried to obtain 5 (one more than the total available) that then the product showed as out-of-stock...
Is there a reason you're not using the dynamic dropdowns aspect? It cares for/displays the out-of-stock on page (in the list) rather than waiting for the product to be added to the cart to discover that. And the terminology can be changed in the file definitions to show back-order instead of out-of-stock or something like that...
Also from the post at the top of the previous page:
Under Configuration->Dynamic Dropdowns->Use ZC default HTML Attribute Tags
set it to false if it is not
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