Lupus can involve many organs and peripheral neuropathy is in the list but sure is uncommon.
You have a family history of diabetes and you have been on steroids for 14 months and counting,and that's a recipe for Diabetes to occur.
You had a previous episode when your sugars went high which you could bring back.Now the precipitating factor is prednisolone.Containing the flare in lupus is the first priority for you and steroid-induced Diabetes is incidental.Usually once the steroids are tapered off,the glucose values return to normal,but in your situation it is unlikely because of the prolonged use of high dose steroids.
Don't worry about the glucometer accuracy when your sugars are in the mid 200's.Anyway glucometers are not designed for diagnosis of Diabetes.
Yes,the neuropathic pain will and should subside once you can bring blood glucose values to within limits.There are many medications touted as the best for managing neuropathic pain,but blood glucose control is the best drug yet!