Sir, i would like to respectfully disagree, and yes i am a layman when it comes military. But my understanding is in modern conflicts the one who commands the sky will eventually win on ground. Even in Kargil, although PAF were kept in dark PA was able to hold ground. If you are able to have air superiority over kashmir and able to cut land supply routes of kashmir from the rest of india, which i think wont be many. The IA should capitulate. I know its easier said than done, but IA and location of J&K will have its shortcomings.
As for going nuclear, Kashmir is a disputed place, if pak invades and captures kashmir territory India using nukes will not have any justification (even if they deploy in worst case scenario) the whole world will jump in and than you can negotiate.
US and west wont have embargoed Pakistan only as India was the aggressor at that time, even in 65 they did embargoed both. But the embargoes and sanctions is a understood thing in any Indo-Pak conflict. But both parties will be supplied through backdoor channels.
I see kashmir just as to maintain military status quo from pakistan perspective. Since pak would never be able to solve this issue military and politically.