I agree; JF-17 is now reached a first stable baseline but with many compromises.IMO ... for a 'JF-17 NG' to be a success, it would basically have to be a redesign of the JF-17.
The current JF-17 is a compromised solution by design so as to save costs (e.g., stable design, limited range and payload, etc). It's a semi-modern solution in that it delivers the right electronics and weapons, but for it carry next-generation needs, it'd need a lot of reworking.
This could basically be a project in the vein of the Tejas Mk2 and Gripen E/F.
IMO, a workable alternative is to call a moratorium on any further JF-17 design work, but instead, extend the production run to 250-300 using the JF-17B and Block-III combination. Let's freeze any further work and start saving money via economies-of-scale and a reduced development overhead.
In tandem, we can venture into a joint-project for a twin-engine NGFA (e.g., TFX) and, in parallel, start actual studies on an eventual JF-17 replacement. The cool thing about the TFX is that it presents us an opportunity to ride shotgun with the Turks and basically learn the fighter development process.
We can re-apply those learnings to our own indigenous single-engine NGFA (which we can slate for a 2040 or later timeframe by developing the inputs on our own, albeit slowly). If we co-invest in the inputs, we can also re-use some of the TFX stuff, e.g., TR Motor engines.
Time again is in question given the urgency to replace Migs/Mirages - that is why 250-300 figure holds as it is good enough. In parallel a seperate team to work on redesigns, lesson learnt, integration, new system patterns/practices. This is where I strongly support your suggestions that locally sourced components are key - supply chains can be compromised and local engineering in terms of R&D, innovation, material sciences need to be harnessed via private consortiums locally; where needed is there potential to join the design such that JF17NG/T-FX can merge or use most of common components.