1) Should non-diplomatic action take place?
This a non-starter, even if the correct/proper and/or desired response is something other than diplomacy. More specifically:
"I'm writing on the 21st floor of the Lotte Hotel in Seoul, South Korea, conscious that around 14,000 North Korean artillery pieces are trained on the city, and that I am just six minutes flying time away from North Korean airspace.
Military planners believe that if a war were to break out, North Korea could rain hundreds of thousands of shells an hour on the 12 million residents of Seoul. Many of these could contain chemical or biological weapons. Perhaps in a week, US and South Korean forces could silence the guns. But in those terrible intervening days, the minimum estimate of civilian casualties in Seoul is a million, and the toll could rise to two or three million.
***
More sophisticated Koreans think that the conventional NK threat from artillery, Scud missiles and planes is so vast that a nuclear attack could be little worse."
See:
http://www.rogerhelmer.com/seoul.aspSo, again, non-diplomatic action is a non-starter.
2) Is this a preclude to using nuclear weapons? Am I concerned?
Kim Jong Il may be a malovent miscreant, but he's not entirely dim. He understands that if he uses nucs, that North Korea will be "dematerialized" in reply. What he wants is to blackmail those in the world who claim to care. Rather than play his game, I would simply suggest that we inform the government of North Korea that if that government uses nucs, or transfers nucs, or the technology to fabricate nucs, to some other entity or person, and such entity or person uses such nucs and/or nuclear technology, that North Korea will face "prompt and utter destruction" [and that this time it won't be "mere" hyperbole].
3) Do I believe that North Korea is a real threat, or simply reminding us that it exists?
Hard to say actually. On the reminding side, simply note again my remark above about the NKs simply wanting to blackmail the caring world. With all the focus now being on Iran, this may be a reminder, I mean, blackmail sometimes calls for a reminder, yes? The complicating factor is Seoul. Given the proximity of Seoul to the NK side of the DMZ, hard to say just what someone such as Kim Jong Il might do. As MP Helmer reports, and he is correct, the damage from a "mere" conventional attack wouldn't be all that different from the damage inflicted by a nuclear strike. So Kim Jong Il could simply "play it safe" from a PR standpoint and refrain from a nuclear attack while still inflicting devasting human and material loss on the ROK. And then there's our will to absorb casualties. We'd lose a thousand a month [as opposed to the more than 2K we've lost in Iraq in very nearly 3 years]. Do we have the stomach for it? Or more correctly, does Kim Jong Il think that we have the stomach for it? Who knows, I certainly do not. And I don't know how to otherwise read our pullback from the DMZ [out of artillery range, well, more or less]. Was that simply to get out of range and never mind the immediate likelihood of a conventional artillery attack? Or do we think the man more unstable than even I suspect and so we pulled back thinking that maybe it's about time for the NKs to send some artillery in our general direction? Who knows, you'd have to ask those who made the decision to pull back. Sorry, forgot to add the third possibility re our pullback, to wit, since we apparently do not believe that the ROKs are correctly evaluating the threat posed by the NKs, maybe we sent the ROKs a message, to wit, please, by all means pursue your "Sunshine" policy, but if that don't work, please also know that it will be you and not us, who pays the immediate and rather devastating price of any initial NK attack by heavy artillery and SCUDs. So, again, hard to say, but if just had to place my bet, I'm going with the narcissist who wants to bribe the free world is simply reminding us that we have more to fear than Iran and that it is once again time for us to pony-up and pay some protection money.