I definitely agree with your theory!Joshua's son, John, seems to be the most likely candidate to have married Sarah Graham and since his family was from Smith County, TN, it makes perfect sense that he would return there after Sarah's death.
The Bible does not say where in Arkansas Sarah died, but I'm thinking it might have been around Independence County.
If you noticed on the 1850 census, the Hubbards' neighbors were Allen and Martha (Dodson) Worley who married in White County in 1849.If I'm not mistaken, Allen was the son of Finch Worley.In 1860, Allen and Martha were living in Washington Township, Independence County, AR.Families usually traveled together in those early days, so possibly the Worleys and Goads were following the same path.By 1870, the Worleys were in Missouri.
It's possible that a number of related families were relocating about the same time.The Grahams, Sarah's parents, moved into Lamar County, Texas in 1854 and later settled in Denton County.Several members of their family remained in Texas and others went on to California.
My purpose in trying to locate Sarah Goad was to learn if she had any descendants who might still be living.Apparently, if there were children, none of them lived past infancy.