Hmm, linked worked for me, brings up a on line form to apply for a new or upgrade service change, you need to step thru with specific info to get < I assume , more details, on what they want for specs.
Here is the home page:
FirstEnergy Corp.: Home
There is a pulldown menu to select your power utility, New Jersey Central P&L.
My point with the utility is that you do need to consult with the utility, one to apply for the upgrade, as they want to know, or should, what loads you have, is existing service location OK, type of meter sockets they have approved, etc.
#2/0 copper is good for a residential 200 amp service.
Your service has no ground at all? Is there a bare # 8 copper leaving the box that contains the Main breaker? That should be going to at least one ground rod. It may connect to the well water line if that incoming line is metal. A metal water line buried at least 10 feet is allowed to be used as a grounding electrode.
The water line in the home should be "bonded" with a copper wire, but that would not act as the ground. This can be a bit confusing, let's step thru as we go, and see what you do have and what you need to do.
Feeding a subpanel off a main panel is usually done by using a branch circuit breaker in the main that will feed the sub.
There are panels that have subfeed lugs, but are special order, and only done under certain conditions, none that I can see apply here. If the main panel is a 200 amp, that panel would not allow a 200 amp branch breaker, usually 125 amp max. This is what would probably be the method you use. I would use the Main panel for as many large loads, such large appliances,AC, and feed the subpanel for lighting and general purpose circuits.
See if you can go thru your utility application process and we can go from there.
If the links still do not work , I did a google search for "New Jersey Power & Light"