I think part of the idea is that weapons systems have changed such that if another country invades, what exactly would they capture? Laptops? Maybe the people - and then what? You're going to make them be as productive as they were but working for your regime? Plus, small nations with asymmetric warfare opportunities - e.g. you're a small city and you have a big aggressive neighbor, why not create a bunch of cyber attacks that can be triggered at any moment rendering the value of any attack moot or negative. Agreed for islands where the intrinsic value isn't the human capital this might be a serious concern, but I doubt it for a place like this.
I think you're being sarcastic but exactly! It basically worked for North Korea and I bet Ukraine wishes they held onto theirs these days. But idk if even something as powerful as a nuke is needed, you just need some measure that makes attacking the place less valuable than not. Personally, that screams cyberwarfare to me (e.g. yeah you can take our city but by the time you do I will have shut down your electric grid and financial market for a few days) but who knows