I want to start on your comment about the relations between Pakistan and India first, so if you're allow me...
The relationship will improve, regardless of what you say. They improved drastically during NS's last term in office, why wouldn't they improve now? The only reason why NS was kicked out of power was because he tried to pick a fight with the army that he knew he couldn't win. Times have changed since then, Pakistan and India aren't as bitter about their rivalry as they once were. The people of both countries are sick of fighting, and the military of Pakistan is too tired and has too much of a tarnished image to try and pick a fight with the increasingly powerful judiciary and increasingly assertive government.
Next, I already know most of what you're saying, but with China pouring billions of dollars into creating new engines, the Chinese are further ahead than India in this regard. They've already successfully created the engines, the problem is only the quality and lack of maturity of said engines. Their quality needs to improve and the engines need to mature enough to actually be considered good enough for fighter air-crafts. India hasn't put nearly as much time, manpower and money as China has, which is why India is behind in this regard. China has also been using existing engines as base platforms for their own engines, while India has been trying to create it's own from scratch, which give China another advantage in the field.
The JF-17 is good for what it is, regardless of it's metal body. It's a low cost 4th gen air-craft, that is only meant for defensive purposes. Considering that it costs less than other 4th gen air-crafts, a metal body is a decent compromise for a lower price tag. As long as it gets the job done, I don't think anyone can complain.