No 2 won't solve anything tbh. India has fought with Pakistan over Kashmir many times and it hasn't changed squat. The problem in Kashmir is not only Pakistan but the residents of Kashmir and the Indian policy in Kashmir as well. It's true that Kashmiris have never been made to feel included in the Indian common wealth until very recently. So the general mindset of the common Kashmiri will take time to sway to the Indian side. The only reason Pak sponsored terrorism works in Kashmir is because Kashmiris themselves weren't really fond of India either.
So really, neither of the two are solutions, atleast not to solving the Kashmiri issue ones and for all. Yeah, now you if you say that India needs to stand up against Pakistan's misadventures then absolutely, the targetted killing in Kashmir has been going on for way too long now and India needs to do something stern about it.
But as for effectively making Kashmir an integral part of India, including it's people, there really needs to be inclusive governance from the Indian side.
According to me, INDIA never invaded POK since its independence. So the claim, "
India has fought with Pakistan over Kashmir many times and it hasn't changed squat" doesn't really stand true.
As for the second part, where you talked about the average Kashmiri not being fond of India, how can you expect a highly radicalized Islamic society to accept kaffir as their rulers? Are you blatantly ignoring that the Kashmir conflict is not about separatism but about jihad, reclaiming "Muslim land" from the hindus?
Those who keep forgetting why the average Kashmiri doesn't feel Indian, need to watch this AGAIN
The only way forward in Kashmir is goverment controlling these masjids where these jihadis are manufactured. Children needs to be given their basic right of going to school and these madrassa should be banned.
The fact that after 25 years of continuous conflict, despite knowing the root cause of terrorism, goverment hasn't banned these madrassa, tells you a lot about the average Kashmiri and government will to bring the so called mythical "normalancy" in the land.