When Pakistan became a republic, there were suggestions to add "Islamic" in front of the Republic of Pakistan because it was our cultural thing and given the fact that Pakistan was a Muslim majority state and Pakistan itself was created for Muslims. At the time of adoption of Islamic Republic title, Pakistan was the only state in the world to hold such title.
However, despite the "Islamic" title, it wasn't a theocratic state at all: eg. Alcohol and Prostitution weren't illegal. Several laws were very secular, others more religion centred, so all in all Pakistan has been a mix of a variety of laws; and people had been satisfied with that. It was only during Zia-ul-Haqs regime that Pakistan started to become somewhat "Islamic". Even today, several laws are Islam-oriented, while others are not.
So...I don't really know what you think an "Islamic" republic exactly is, it's more of a cultural thing for us rather than an absolute orientation.
Also, fyi, most Pakistanis don't want to "live with Hindus" because we are quite proud and thankful for a separate "homeland" we got; not because we "hate" you. Get over yourself, like SHAMK said, all that is required for normalisation of relations and sweetening of common sentiments is the end of the Kashmir dispute.