1. The PN is both technologically and numerically inferior to the IN. The surface fleet wouldn't survive a conflict. Couple of dozen F-16s is not going to bring down the comparable MiG 29SM or the Mirage2000H(which are numerically superior) let alone the MKIs which now number well over 50.
2. Works both ways. The PA is not in any way better equipped to deal with tactical nukes.
A radical government at the Indian centre could authorize a nuclear reply. Where does the war go from there?
Pakistan cannot afford a nuclear strike on its cities anymore than India can. The recently revealed Indian military doctrine is designed especially for a war in such circumstances and will go just as far as is possible without forcing Pakistan to resort to nukes.
1. Who cares whether the PN survives a conflict as long as a total blockade cant be implemented of Pakistan (which even while being destroyed the PN will achieve).
The only thing more pathetic than F-16's are those Mig-29's and Mirages. A couple of dozen F-16's along with numerous anti-air defence weapons will prevent the IAF from achieving airsuperiority over Pak. airspace.
2. You misunderstand the situation. That it works one way (Pak. to Indian) is the only one that matters simply because firstly before India attempts adventure it will recognise that there is probability of nuclear attack on it. The catastrophic damage of a probabilistic nuclear threat will ensure that the payoff from adventure is lower than from staying put. If indeed India attempts adventure then there is a high probability that an attack will occur. Your saying that an Indian probabilistic threat of nuclear strike will prevent Pak. from employing it. This is incorrect simply because it is not credible. Since India has conventional superiority, it is always in its interest to try to resolve situation conventionaly. A probabilistic nuclear threat to prevent Pak. from employing it will simply not be believed by Pakistan.
The other point of yours is that, Pakistan can not make a probabilistic threat because any nuclear attack by it will invite nuclear retaliation. This also is incorrect, even if there will be a definite nuclear reply to Pakistan's nuclear attack a probabilistic nuclear threat from Pak's point of view can still be efficient. It is simply a risk vs. return thing. For e.g. Pak. might set a 30% of nuclear strike if India advances 40 km into Punjab, this threat means that India will in its cost benefit analysis include the damage from nuclear attack (30% * damage from nuclear attack) on the cost side of the invasion situation. If for e.g. a push by Indian forces 250km into Pak. is a definition by which Pak. leadership believe the nation is destroyed, then they will set probability of nuclear strike for when this occurs at 100%. It can thus be seen for every type of Indian "action" a Pak. probabilistic nuclear threat can exist, for more severe Indian actions there will be higher probability and for less severe a lower probability. What these probabilities do is ensure that Pak. remains indifferent form suffering the Indian action on one hand and from probabilistic destruction by India on the other hand. For e.g. if 30% probability of threat is set by Pakistan for invasion of Punjab, this means that Pakistan is indifferent between losing Punjab one hand and on suffering 30% probability of being destroyed on the other.
By always ensuring that indifference is maintained between "suffering" and facing probabilistic destruction, Pakistan's nuclear capability can provide maximum amount of deterrence capability.
So a short reply "Where does the war go from there?" In reality the war ends once the nuclear weapons are launched.
If you have a son, and the son is misbehaving you can make a threat "If you dont stop misbehaivour, you will be banished from home". Of course, you dont want your son to be banished, but neither do you want him to misbehave. What is the level of threat you should make? well if the payoff you get from banishing to you as father is (-20) while payoff from him continueing to misbehave is (-5) then you will want to make a threat of banishment of probability of 1/4. If your probability is less than 1/4, (implicit assumption that son enjoys misbehaving) then son will misbehave too much. If probability of threat is more than 1/4, then the risk of heartbreak by chasing son away is too much.
By same analogy, for every given possible "action" of India if probability of nuclear threat of Pakistan is too low, then India will overengage in that action. If however the probability of nuclear threat by Pakistan is too high, then the threat of nuclear destruction is too high and therefore risk is too high to be efficient.