A permanent seat for India in UN doesn't help Pakistan in any way as per their perception and thus their protest is genuine and in line with their foreign policy. The second question is about Pakistan's interests in Kashmir. There are two important issues about Kashmir. The first is its strategic location and the second is it's economic value.
From India's point of view Kashmir is strategically very important. Imagine a Kashmir in control of a foreigh power. Any mechanised military force can just roll down into plains of Punjab while it will be an extremely difficult task for us to attack up in mountains. So, we need Pir Panjal and Zanksar ranges for our national defense. Similarly it is also important for Pakistan as any military can roll down into their plains of Punjab from Kashmir hills.
Kashmir for its natural beauty and weather, attracts lots of tourists and thus the economic importance.
Pakistan is taking advantage of it's demography, by saying that it is a predeminantly muslim state. But then there are many parts in India where muslims are in majority, all those areas can't be given to Pakistan. If Kashmir was that important to Pakistan, then why didn't they get it at the time of partition. They should not have accepted a muslim state without Kashmir being part of it.
Kashmir is a different society itself. They have their separate language, and culture.
The question is how Pakistan has been able to exploit the demographic equation to her advantage. The answer is the lack of development on part of central government. The Central govt had given maximum aid to this state since independence, but never asked for accountability how it was spent. The development is negligible. This had led to the frustration of the people and thus made it prone to be exploited.
One possible solution to Kashmir problem could be:
Identify the current LOC into the international border.
Carry out developmental activities at a fast pace to provide employment to the people rather than subsidies.
Development a very extensive train transportation as well as road network in the valley.
Establish, industries in the valley related to the local products (like fruit jam, juices, silk and garment industry).
Keep a vey close watch how the funds are spent. Probably, they might need help of military to carry out development activities.
Utilize the natural resource available in the state for building purposes.
There is a lot that can be done. Make a 10 year plan and leave Pakistan occupied Kashmir far behind in facilities and you will find they will ask for joining with our part of Kashmir.
I know, it is difficult, but definitely not impossible. We wasted very valuable time between 1948 and 1965 on Kashmir and if we had carried out these developmental activities then, we would not have faced problems now.
By the way Kashmir is not the only state. Probably we need to pay attention to our Eastern part of the country as well.
Accountability is most important. We must stop the politics of subsidies and reservation, and we will be much happy society and nation.
