The fact that Palestine (I include the State of Israel in the way I'm using it right now) is the Jewish home is a combination of history and practical politics: Palestine was historically important for being the site of the old kingdom of Israel, and eventually was part of the road to British victory against the Ottoman Turks, which gave the Yishuv a window to establish a political presence there since the late 1910s. You can't say the same about Uganda or Madagascar.
They both were considered.
Your position on the Arabs doesn't make any sense. Arabs with Israeli nationality are mostly very much Pro-Israel and they should be the last ones to be kicked out of Israel/Palestine.
This is factually wrong to a ludicrous degree. Israeli Arabs are generally Pro-Palestinian, often radically so. That's not to say that plenty of them aren't loyal, but they will remain feared and despised in Israeli society as long as the radicals are there. I think you're confusing them with the Druze.
Especially since you apparently want to give away West Bank, which would require dismantling the settlements, which would probably cause a civil war far more bloody than the current Israeli-Palestinian conflict.
Nah. Most settlers are really attracted to the West Bank because the Israeli government gives them tax breaks and nicer living conditions. There are groups that would fight, but not enough to plunge the country into civil war.