I have little doubt that there are people in position of power who have an extensive "toolkit" and will be willing to use it if needed. However it is my opinion, that these comments, because of the timing, are less likely to indicate anything beyond what is already know. There is a scheduled FS meeting on August 28 which is happening after a very long gap. In the face of some domestic unease about the repeated ceasefire violations and a perceived mellowing down on Modi previous comments on Pakistan, these comments are more likely than not be for domestic consumption(the Pakistanis know the GoI's position anyways). Modi's stance on Pakistan seems to be far more nuanced than what people thought before. It won't be till some time has passed for us to actually figure out what his ideas are. Suffices to say that there is a lot more to the India-Pakistan relationship under Modi than mere spouting of rhetoric. While Modi will be a lot more hardline if there is a serious attack, the comments now when that is not the case, is unlikely to be of that wavelength.
I disagree with abrogation of IWT etc. That is at a level way, way high from the present situation. We can of course wait & see which one of us is right on this score.