I agree with you that Hyderabad, Junagadh and parts of Kashmir (not Jammu) should have gone to Pakistan. However in reciprocity all muslims in India should have gone to Pakistan. Then it would be a fair deal since the basis of division of land was religion!
Think about it, if all muslims in India were in Pakistan: 1. Indian congress would not be wooing Muslims for minority votes. BJP would not even exist. 2. Pakistani politicians couldnt use Kashmir as an election issue. Instead they would have been exposed of their inability to govern and remove poverty in Pakistan. 3. All political parties both in India and Pakistan would be fighting elections on real issues.
I think it will be win-sin situation. Can we do it now ? Probably not since Pakistan will not accept India Muslims and India will not give up Kashmir. So why fight on a problem that we cannot solve ? Let us try to solve problems of poverty and education. Maybe after 500 years everyone will form a part of a Union like European Union and the problem will be solved automatically. Remember that France and Britain were fierce enemies. I guess the difference is that both are Christian countries.