You think it is not a territorial issue? If it was humanitarian Pakistan would not killed millions of Bangalis in East Pakistan. They would not stop from Biharis to come to Pakistan who have been stranded in Bangladesh for thirty years. Dont talk about humanitarian issues.
Is Pakistan ok with losing AJK, Gilgit and Baltistan if Kashmir becomes independent?
I dont think India want Pakistan adminsitered Kashmir. Offically it wants entire Kashmir but realistically it know that LOC would become the defacto border. In no way will India give any more land to Pakistan.