Energon,
let us first understand why Pakistan has become what it is, so that we can understand what are the possible remedies.
We all know that Pakistan was supposed to be the homeland of all muslims of pre-independence India, because they did not wish to live on equal terms with 'yindoo baniya' India. Of course, Jinnah's ambitions also played their part and so did the famous British divide and rule policy. But all that apart, the main reason, raison de taire of Pakistan was that it was a land carved out of India where muslims could rule according to their wish. This was not possible in India for many reasons, India was predominantly hindu and most probably remain so, India was about to be a democracy and in democracy, one needs numbers to snatch power, muslims didnt have it. Of course, they would have enjoyed all the rights and live a diginified life, but they wouldnt be able to 'rule' like they once did(according to them) during Mughal era. Now, the muslim elites did not wish to live like equals and instead chose to demand for a separate nation where muslims could rule according to their wishes. This was/is the raison de taire. I stress this point.
Once Pakistan and India were given independence, Pakistan found a need to define a 'national character', so to say. It was widely believed by many at that time that eventually the two nations will unite, sooner than later. This was the fear that even the rulers of Pakistan had. So, they decided to define Pakistani nation as distinct and different from India. This required Pakistan to be different from India by being anti-Indian. Then there is another angle, Pakistani nation has never been comfortable with regional, tribal, cultural, linguistic identities. The rulers of Pakistan tried to 'unite' Pakistan through Islam. Islam and anti-Indian feelings were supposed to be the glue which would bind Pakistan together. Urdu was made the official language of Pakistan eventhough it was not a language that any of the regions of Pakistan spoke. Neither Balochistan, NWFP, Punjab, Sindh spoke urdu as their primary language. Urdu was the language of mohajirs who migrated from Lucknow to Karachi. In the initial phase, it was the mohajirs who held the power and they tried to make Pakistan 'united' by forcing on them urdu and islam. Soon the Punjabis took the power from the mohajirs and today mohajirs are sidelined a lot. And also the Pashtuns have been denied even their simple request/demand of naming their province as 'Pakhtunistan', instead it is called North Western Frontier Province. The people of Pakistan have been consistently denied any regional, linguistic, tribal identity apart from islamic identity. The people have been encouraged to look at themselves as muslims first. Zia-ul-haq took Pakistan in direction firmly to a point where there was no looking back. Even before that the rulers did the same, but Zia sealed the doors of reform and established the seeds of ideas of 'caliphate'. All this to counter the idea of India. You have to appreciate the fact that a newly formed artificial nation does not have its own identity. For example, East Germany had no separate identity from West Germany. Pakistan had the same problem. So the rulers stressed on making Pakistan different from India, so that the idea of merging with India never comes up. There was/is great fear within the ruling classes of Pakistan that India could gobble away Pakistan, not just militarily but culturally. Therefore, Islamic identity was stressed and India was portrayed as a hindu nation, further the people of Pakistan were taught through all means and media that Hindu India subjugated its minorities, Kashmir was presented as an evidence. Therefore Kashmir is not a problem but a symptom of the problem. If Kashmir is solved, something else will be shown as an evidence. The main goal is to portray India as suppressing muslims and therefore an enemy of muslims. Then stressing the Islamic identity of Pakistan. To stress on the Islamic identity, Pakistan has rejected their pre-islamic south asian identity. This is where the problem lies. Pakistani text books start their history from the time of islamic invasions on India. Nothing is mentioned about times before that. Generally, it is represented that the people were jaahil(cultureless, illiterate) before islam arrived and once islam arrived and won(due to its supposed inherent supiriority over the locals and their customs), the local people were converted. Many Pakistani muslims view themselves as the descendents of those rulers/invaders. That is effectively rejecting their south-asian identity and acquiring a central-asian or saudi identity. So, the rivalry between India and Pakistan is not limited or a result of any boundary problem, it stems from the identity crisis of Pakistan. Irrespective of the ruler at the helm of Pakistan, subsequent regimes have continued this policy of hate towards India and more islamization to 'preserve' Pakistan from the cultural invasion of India. Radicalization of Pakistan through KSA sponsored madrassas is part of this agenda. Are you now able to see the pattern, fear of being similar to India and hence being assimilated into India has pushed Pakistan towards hatred towards India and radicalization, which then fuel more hatred and hence more vigorous attempt to destroy India, failing which there is more hatred and more radicalization, which results in more attempts to destroy india and so on. The cycle has been running for past 60yrs.
This is the real problem, Pakistan in its present condition is incapable of being friendly with India. Also it is not capable of being a modern state either. Whether it is stable or unstable is not the factor in it. Let me explain why.
Pakistan is ruled by Army. Army gets all the funds for itself by perpetuating the fear of 'big bad India'. If Pakistan befriends India, then immediately Army will be the first to suffer. Army wont be able to usurp huge portion of budget of Pakistan, then army will weaken. As Army weakens, its hold over the domestic politics of Pakistan will weaken and consequently it will become a mere spectator. Will pakistani army let this happen?
So, the first and major hurdle in making Pakistan a 'friendly' nation is Army. Weakening the hold of Army over Pakistan is out of reach of India. PA is mainly funded by the US, China and KSA. So, effectively India cannot do anything to make Pakistan friendly. It is not in the interest of US, China or KSA to allow Pakistna to be friendly to India.
You may say that Pakistan could remain an anti-indian state and yet become a modern, vibrant and progressive nation. I disagree with that notion. Pakistan cannot be modern, vibrant or progressive. Because India is modern, progressive and vibrant. If Pakistan becomes similar to India. If Pakistan also gives rights to its minorities(an essential feature in democracy), has a progressive society, then it becomes similar to India. Then the logical question will be asked by the populace(now intelligent, progressive and modern) of Pakistan about why Pakistan as a nation exists, when they could have been a part of India and have done all this, why is a separate nation needed?
The question will be Pakistan ka matlab kya?
If the debate then is intellectually honest, then they will realise that creation of Pakistan was a blunder and take steps to rectify the same. Thus a modern, progressive and vibrant Pakistan will soon see no reason to live separately from India and both will try to unite. Thus Pakistan ceases to exist.
On the other hand, if Pakistan continues its present cycle of hate-india, radicalization, hate-kafir(india),radicalization...etc, then sooner than later Pakistan as a nation will be destroyed. Thus Pakistan ceases to exist.
The Pakistani state is an artificial state carved out of India by the British through ambitional jinnah, to weaken the state of India. The Pakistani state is trapped in such a way that it could never be friendly towards India, it is compelled to be hostile to India. But when Paksitan is strong, stable and rich, its ability to cause damage to India increases, while when it is weak, unstable and poor(living on aid), then its ability to cause damage to India decreases. Thus Pakistan as long as it exists in its present form will remain hostile to India, but its ability to damage India depend on its stability. From India' POV, this ability of Pakistan must be kept at as low as possible, that would mean Pakistan remaining a weak, unstable and poor nation. That is in India's interest. But this is temporary relief. The long-term goal must be dissolve the present Pakistani state and dismember the same, so that India could remove its threat and at the same time extend its influence over the newly formed states.
The best example is BD. Had India not interevened and freed BD from Pakistan, today BD would have been East-Pakistan. Imagine the mischief that Paksitan could forment from here and India would be helpless under the nuclear threat. A free BD is more in India's interest then East Pakistan. Similarly, a free Balochistan, a free Sindh, a free NWFP would be more in India's interest.
Of course, you might remind me about the potential refugee problem if Pakistan state collapses. But I believe that the refugee problem is very small and manageble compared to the terrorism India faces under the nuclear umbrella of Pakistan. So, an unstable Pakistan is in India's interests, but India must strive to dismember and denuke Pakistan, that will give rise to permanent solution which is beneficial to India. The present circumstances are against India.