Picard was a fool not to employ that weapon against the Borg, if it had worked it would have save countless lives and prevent more from being taken as Borg slaves drones.
Necheyev was correct.
The Puzzle wouldn't have worked, it would have just alerted the Borg to the Feds' attempt at such a thing and provoked a genuine Borg invasion they wouldn't have survived. You don't go around provoking a vastly superior force with something you aren't sure will work.
Perhaps, but it does show and prove that the Federation is willing to use force to get what it wants territorially.
And the order didn't originate with Necheyev, it came from the Council.
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If that were true, they wouldn't have allowed those colonists to renounce their citizenship and become Cardassian subjects. They ultimately WERE willing to let them stay on their terms.