Reality check
All of those are fairly tame responses to North Korean aggression.
Of course, an escalation leading to war is not desirable, but if the North gets away with merely a slap on the wrist, it will be an encouragement to continue hit-and-run attack policies indefinitely. If the most right-wing anti-NK Lee Myung-bak government doesn't conjure up decisive actions to "punish" the North, then who will?
For sure, there is a bar beyond which war will be an inevitability, but the North will continually press actions to approach that bar, but never cross it.
==> For the past sixty years or so, the North has conducted hit-and-run attacks as many as 470 times. Four attacks tried to directly assassinate the previous presidents. One succeeded in only killing the First Lady in the 1970s. Another attack in Rangoon, Myanmar pulverized as many as 17 ministers and secretaries - all highest office holders. The President could narrowly escape the 'planted time-bomb' attack. Myanmar severed its diplomatic relations with the North.
Despite all these terrorist attacks, South Korea has never retaliated. The North has made a military barack out of their whole land. And its modern version of the Spartans - crazy ones at that. Thus, prosperous South Korea has never tried to provoke North Korea.
Military responses or more hostile retorts should be avoided on this occasion as well. For, they are exactly what the North wants now. One of the reasons why the North carried out the attack is their internal instability - to depressurize the otherwise implosive tension within by attacking and turning North Koreans' attention to outside. Recently, the currency reform miserably failed; Kim, Chong-Il himself suffered a massive brain stroke with his health manifestly deteriorating; there is no solid hereditary successor; a strong candidate, Kim, Cheong-Eun, is too young at 27 or 29, and has no support from the old guard; its economy is literally in shambles.
It would rather be quite surprising if the North had not carried out the submarine attack. Given their historical pattern, the South should have foreseen the West Sea attack.
Be that as it may, any military or hard-line reprisal would only re-strengthen their unstable leadership and its knot of the father-to-son power succession. A better approach is to help the North Koreans to wake up to realities and their surrounding worlds. Radios, TVs, magazines, internet, etc. are all strictly banned; so far quite surprisingly sending balloons with hundreds of thousands of leaflets over to the North Korean sky has been proven to be the most effective method of achieving the goal of enlightening the North. Perhaps, as for the South Korean government, it seems best to leave the job in the hands of North Korean defectors and like-minded civic organizations. The latter have been doing a superb job so far. The North even proposed to the South that both have a military talk at Pan-Mun-Jeom along the border. Only to make very strong protests about the leaflet sending balloons. Which clearly shows how effective and threatening the leaflet propaganda has been.
If the U.S. is really concerned about North Korean WMD proliferation, and direct military precision strike is unthinkable, then this kind of "soft" approach can achieve the goal. The North is a very primitive type of a nation-pseudo-state fanatic group. Thus, any attempt to cause fundamental change should also be "primitive". As luck would have it, the attempt doesn't cost much at all. Even at this point in time, voluntary donation from South Korean citizens has made it possible to send millions of leaflets-inside-balloons so far. If billions of those can be flown over to the North, the North will collapse. If any American intelligence officer should read this, please check this U.R.L. and ask any capable translator to get the meaning. Thanks to the regulation of this site, I can't load the U.R.L. I will later load the U.R.L. to help you get the general idea of the movement.
The U.S. doesn't need all those high-tech missiles or bombers. It's balloons, stupid! (no offence intended.)
Isn't it remarkable for the North to buckle under not the supreme power of the U.S. army or anything of sorts but those feathery balloons? Pyong-Yang (the capital of the North) is deeply afraid and concerned about the specter of their people finally realizing that they have all been cheated in a big way. The leaflets are doing that job. The most effective counter-attack seems to be one of the "soft"-type responses - that can generate a series of chemical reaction in the minds of their own people.
As a South Korean, I would bet that within ten years North Korea will collapse, start to follow suit after the Chinese model, and have its stance much more softened towards the South.