“Blessed rather are those who hear the word of God and obey it.” — Jesus (Luke 11:28)

I believe it's both (grace/religion and righteousness). Religion in my opinion is simply the belief in GOD. I don't think GOD will take it likely with those who deliberately refuse to believe in him. HE will also not take things lightly with those who hear his word but deliberately disobey them.


HERE IS WHAT JESUS SAID ABOUT FAITH AND RIGHTEOUSNESS.
(Notice that Jesus is not impressed by the woman's faith alone. Jesus probably saw the filthiness and sin in her before saying those words)


"As Jesus was saying these things, a woman in the crowd called out, “Blessed is the mother who gave you birth and nursed you.”
He replied, “Blessed rather are those who hear the word of God and obey it.”
As the crowds increased, Jesus said,
“This is a wicked generation. It asks for a sign, but none will be given it except the sign of Jonah. For as Jonah was a sign to the Ninevites, so also will the Son of Man be to this generation. The Queen of the South will rise at the judgment with the people of this generation and condemn them, for she came from the ends of the earth to listen to Solomon’s wisdom; and now something greater than Solomon is here. The men of Nineveh will stand up at the judgment with this generation and condemn it, for they repented at the preaching of Jonah; and now something greater than Jonah is here.
“No one lights a lamp and puts it in a place where it will be hidden, or under a bowl. Instead they put it on its stand, so that those who come in may see the light.
Your eye is the lamp of your body. When your eyes are healthy, your whole body also is full of light. But when they are unhealthy, your body also is full of darkness. See to it, then, that the light within you is not darkness. Therefore, if your whole body is full of light, and no part of it dark, it will be just as full of light as when a lamp shines its light on you.”and obey it." — Luke 11:27 - 34