Simple. If the both side stop poking nose into the other side of the border and concentrate on their own affairs to get more powerful, thing will be settled down. Kashmir is important for both but not more than the existential threat posed by the MAD for both sides. Everywhere only the powerful ones dictate the game, isn't it? None ask a serious question to UK,USA, Russia or France about their presence in Falklands, Guam, Crimea or French Guiana...because they are the powerful ones. I am sure if India would not decolonize Goa, it would still remain as a colony of Portugal. So if both side becomes powerful enough, everything is bound to normalise. Remember, independent J&K would not be powerful enough overnight to resist two neighbouring nuclear powers meddling into their internal affairs. Rather the whole mess will attract more world powers to intervene. So it would be the best and rational solution to share the land and close the case forever.
It would be a naive thing to consider that the independent J&K will be a de facto province of one and the other side will remain mere spectator. The basic prolem is that this issue have become a consistant political weapon for both the countries and none is ready to sacrifice this.