Israel can't just be bombing Iran and then nuking them when Iran retalliates by bombing them back. Because this will be too much bad PR even for Israel as the vast majority of people will find evaporating people indiscriminately is unacceptable.

With all this considered I think it is clear why Iran is able to bomb Israel back and Israel can't just nuke them.

I think the points you made about why Iran would give nuclear weapons to terrorists make no sense. Because Iran would, presumably, get obliterated when those terrorists use those weapons on any country.

As far as I know, full-on invasion of a country that has nuclear weapons has never occured in history so far. So Iran having nuclear weapons in a defensive capacity is obviously good for them. In fact all countries having nuclear weapons in middle east might have made it more peaceful but would have been obviously terrible for Israel/USA