I don't understand how hurricanes pick and choose areas, but Atlantic City wasn't hit as hard. The barrier islands got hit the hardest. Perhaps because the small ares of land are between the ocean and the bay.

Type in Atlantic City (below).....then move your mouse north along the shores of New Jersey. See Long Beach Island....divided into several small towns, Beach Haven, Surf City, etc. There is ONE way in and ONE way out of LBI.

Keep going north and see Seaside, Ortley, Lavallette, go further north to Mantoloking. See how narrow Mantoloking is? During the storm, the ocean came through two streets, and now the streets are gone, and a canal of water runs from the ocean to the bay, dividing Mantoloking now in two places.
[link to maps.google.com]