My husband, the LPR, is eligible to become a citizen because we have been married for 8 years, so obviously he could have applied a few years ago, but didn't. He applied now, and put his reason for eligibility that he has been an LPR for at least 5 years, NOT that he is eligible thru marriage. Will that be a problem? (it is true, but I wonder if he HAD to put marriage since he came on a K1)

Not a problem at all.

In fact, if he's eligible without the marriage, it's probably slightly easier to apply that way. If you apply based on 3 years LPR status while married to a USC, you have the burden of proving that the marriage is bona fide and that you've been living together all the way until citizenship is granted. That's not such a huge burden to prove, but if you apply based on the five years of permanent residence, then you don't have to show any evidence about the marriage.