Is the better tactic to just let NK develop more nuclear weapons and missiles and just "hope" the problem will go away?
The main "problem" is that North Korea will have increased bargaining power after having the nukes than before. Anyone who fires nukes at other people knows they will be nuked back instantly, killing their own families and loved ones. The point of having the nukes is exemplified by e.g. Ghandi from Civilization 1 "my words are backed by nuclear weapons!".
Firing the nukes ensures your own destruction. It's not the goal.
Also ... North Korea consumes just 17,000 oil barrels a day in comparison to South Korea's 2.4
million barrels a day. And recently,
China announced sanctions cutting that by 2/3rds. With so little fuel being consumed then you'd have to estimate that they in fact have a miniscule amount of operational conventional forces. Probably the reason they're going for a nuclear deterrent is because of that fact. A nuclear bomb sitting in a stockpile is a more credible threat and cheaper to maintain than a large conventional armed force. Just
having the rockets
and the warheads is a deterrent, even if you
don't mount the warheads on the rockets. You just have to let people believe that it's possible that you
do have some mounted.