Even it only 50k remain, that's still plenty enough to tempt spectacular enough incidents.FWIW, the number of Jewish settlers in Palestine should end up being much less than 500,000 since most of the Jewish settlers in the West Bank will become a part of Israel through mutually agreed land swaps.
Lots of self-selection, outright natural selection, being raised under Israeli culture and education, and subtle group allegiances among Arabs (like Druze or Bedouins not really caring much about Palestinians as that's not them, and even down to clan membership and relations among Palestinians).Your other points here are pretty valid, though it's worth noting that Israeli Arabs have overall been relatively peaceful.
For any right of return Palestinians, completely different group dynamics would play out.