It would've kept britain out of the war and i'm pretty sure France didn't have very strong fortifications on that border
There are a couple of reasons why this didn't conform to the overall vision of Moltke the Younger's war planning, and I'll go over them one by one.
The threat to the Right Flank
Moltke was an advocate of using Fortresses in order to concentrate an entire army and to then counterattack into an enemy advance by hitting their flank. As he states in his critique of the 1908 West General Staff Ride:
The most important purpose of the fortifications of Metz-Diedenhofen is to cooperate in offensive operations by facilitating the undisturbed assembly and deployment of entire armies. If the resulting advantages are exploited, that is, if the corps designated to conduct a flank attack are moved through the fortress, the attack obtains an entirely different effect. In the present case the fortress was used only as Germany's shield, not as her sword. - pg. 217 German War Planning, 1891-1914: Sources and Interpretations Translated and Edited by Terence Zuber
In fact, the deployment of the German 5th Army in 1914 was in such a depth as to facilitate a counterattack through Metz-Diedenhofen and the Niedstellung against a French offensive into Lorraine. The problem with this counterattack would be the threat of Verdun; Verdun was located near the border of Luxembourg and would be able to launch its own counterattack into 5th Army.
The German army would have no way to combat this as Luxembourg's border with France was not enough to facilitate the proper security needed to defend against an attack from Verdun.
Furthermore, there was fear that France and Britain would themselves violate Belgian neutrality. This would once again threaten the right flank of the German Army and "open a path to the heart of Germany's industrial district while the German Army floundered in its advance against France's eastern border, which bristled with fortresses." (pg. 37 Germany's Western Front: Translations From the German Official History of The Great War Part 1)
Basically an attack that respected Belgian neutrality would leave the German right flank extremely vulnerable, even if there was an advance through Luxembourg.
Rail-Lines
Rail mobility was a huge factor for any war plan and Germany was no different than other countries. As you can see from this map Germany's most modern fortress - Metz - had no direct main rail link to the rail centers further north a la Cologne. If the need to shift forces north appeared, Metz could only send them the roundabout way through Strassburg which would waste precious time.
Through Luxembourg and Belgium however, with Liege, Brussels and Namur, Germany would gain the railways needed to either shift forces north or south. This would give Moltke the Younger the flexibility he wanted, being able to face the French forces where ever they appeared. As the German Official History states:
Moltke repeatedly expressed the view that continuing the great wheel through Belgium into Northern France would become pointless as soon as the enemy sought to achieve the main decision in the Imperial Provinces (Alsace-Lorraine). Moltke believed that in such a scenario, it would be correct to convey all available forces from Belgium to this main destination by marching them south. - pg. 77 Germany's Western Front: Translations From the German Official History of The Great War Part 1
Room for Maneuver
Once again from Moltke's critique of the 1908 General Staff ride West; this was an address to the French team that was attempting a breakthrough in Lorraine:
Many studies have shown that there is so little prospect of an attack with all forces between Metz and Strassbourg gaining this superiority that it cannot be advocated. - pg. 215 German War Planning, 1891-1914: Sources and Interpretations Translated and Edited by Terence Zuber
Later on in that same Staff Ride.
The ratio of French to Germans in infantry was therefore initially 2:1, but improved for the Germans until it was 4:3. The Germans had a superiority of about 250 guns. In spite of their great superiority in infantry I decided that the French attack east of Metz would be unsuccessful, which may have astonished some officers. I did so in order to illustrate a point. I wanted here to emphasize once again that in my opinion no success can be expected from a purely frontal attack. - pg. 219 German War Planning, 1891-1914: Sources and Interpretations Translated and Edited by Terence Zuber
With the Right wing ending in Luxembourg there would be no option except frontal attacks, but with the right wing extending into Belgium then there would be considerably more room to maneuver and with it more tactical possibilities.
As an example from the actual campaign in 1914, on September 1st Moltke ordered that 4th and 3rd Armies were to assist 5th army's crossing of the Meuse by attacking in a southeasterly direction. This would threaten the lines of communication of the French forces in front of 5th army and force them to retreat, which was what happened.
Alternatively it also provided the chance to win a decisive victory over the enemy. The only example of this can be found on the Eastern Front where the German 8th Army was able to complete a double envelopment of one of the Russian Armies opposing them.
Both of these examples would only be possible through room to maneuver; as stated earlier there would be no prospect of threatening the enemy's line of communication south of Luxembourg, only frontal attacks.
Conclusion
The vulnerability of the German right flank, rail mobility, Moltke's desire for flexibility and room for maneuver made a German attack against France only through Luxembourg undesirable. Such an attack would immediately be threatened by Verdun and not have much of a chance for a decisive victory, something that Moltke's war planning stressed as a prerequisite for Germany having a chance to win WWI.
Works Cited