I’ve always read that the Roman Army by the end of the WRE was mostly ethnically German. Was this really the case?
You certainly had a Germanization of the Late Roman Armies, with a lack of quality troops in the West leading to massive enrollment of Barbarians in Romans armies either as recruits, mercenaries and, later, as federates. By the Vth century, western Romania saw an extensive use of Barbarian troops in armies, and while non-Barbarian troops were used (for instance, in cavalry or some prestige units) most of them were either garrisoned or mixed-up with Barbarians at short term.
The problem is that you simply didn't have a real "ethnic" value to Barbarians : as distinct peoples, they emerged along the limes (trough political build-up, allowed by the rise of mobilisation features, thanks to raids or subsides initially) from various groups. Goths, for instance, were a mix up of Eastern and Western Germans, Dacians, Sarmatians and Romans even before they definitely crossed the Danube. The same can be told of virtually any Barbarian people entering Romania in the late IVth/Vth century.
Due to this Roman influence, they were alreay more or less romanised at this point (you don't live close to the political, economical and cultural super-power of the era in total isolation), and this romanisation only became more important as they dwelled in Roman provinces, living along provincials, and enrolling them into Barbarian armies. In a sense, Barbarians armies became the prestigious fighting body to be recruited in for Romans, rather than Roman army itself by the 430's; and while you had several Barbarian features in these Late Ancient and Early medieval armies (often borrowed earlier by Romans from either Germanic or Sarmatic peoples), the difference between a Barbarian warlord (Odoacer, Clovis, ...) and a Roman warlord (Marcellinus, Syagrius, ...) both in troops and culture was essentially political.