That is them projecting it would be sold at a loss at first. That doesn't mean it was sold at a loss its whole life, let alone most of it. Parts get cheaper over time/with demand. That being said, the 3ds was absolutely the reason Nintendo had profits in the 3ds/Wii U years.

Bold: Um, power wise, N64 > PS1.

N64 Vs. PS1: Which Console Is More Powerful (In Terms Of Tech Specs) (thegamer.com)

It isn't always that simple. Developers probably saw how much more realistic textures could look on PS1 and disregarded the overall better power/graphics of the N64 to publish more games on PS1.

Streaming money is in expensive premium accounts with 4K HDR+ content and Switch can't offer that so streaming companies are avoiding Switch. These services will be available on a 4K capable Switch Pro.

It sticking with a 720p screen would be a shame since the increased size would result in a bit of reduced crispness but the overall big visual upgrade due to OLED would easily make up for it. I could see owners of it playing it in handheld mode at a higher rate than owners of the LCD model due to how nice games will look on it. For many games will look better than when played on their tv. Hopefully there's a decent power boost too so games like Age of Calamity can get better frame rate.

Ps1 games ususally had higher resolution textures and audio samples because on N64 to make a 32mb game was cheaper than a 64mb game but on ps1 you could go to 600mb at the same price because a disc would be the same to produce. Ps1 had cheaper storage not more power.

raw power is n64

I've gotta say, I've been hearing these "Switch Pro" rumors for about 3 years now, but this is the first one that actually sounds credible.  

“The OLED panel will consume less battery, offer higher contrast and possibly faster response time when compared to the Switch’s current liquid-crystal display,” said Yoshio Tamura, co-founder of display consultancy DSCC.

That part sounds totally believable.  This looks like a cheap way to get improved graphics and more battery.  That is the sort of thing Nintendo usually looks for.  On the other hand, when it comes to 4K I wouldn't expect much.  The XB1 S can stream 4K, but it's still less powerful than the base PS4.  I think the main graphical upgrade we are going to see is going to come from the OLED screen.  This new model will probably get a minor processor upgrade like the 3DS, but not a major one like the mid gen upgrades of PS4/XB1.

So, I think this article is true as long as you don't get your hopes up about the 4k.  I can actually believe Nintendo will have an upgraded model sometime this year, because 2021 is about the right time for it.  I can also believe it will have an OLED screen and a longer battery life and maybe a small upgrade to the processor like the New 3DS did.  This upgrade is going to resemble the New 3DS upgrade a lot more than it resembles the XBox 1 X upgrade.

I'm confused as to why would Nintendo do something like this for "just" a Pro model of the Switch.

Since there's no way the chip powering this new console will be able to render games at native 4K, it's obvious that it will need to use DLSS to achieve that, but in order to do that you need Tensor Cores. Neither the Tegra X1 nor the X2 feature such cores, they were introduced with Volta that powers the Tegra Xavier, a much bigger and powerful Tegra chip designed for AI.

But why would Nintendo waste this incredible jump in performance in a Pro model when it makes more sense for a Switch successor?

That article is just an opinion piece.
When they throw out blatant pieces of opinion like: "graphics have graduated beyond polygons" then you know to take their opinion with a grain of salt.
Polygons are still the fundamental building blocks that forms the basis of all games today.

The reason why texturing was different wasn't because the PS1 had more "realistic" textures, it's because it's textures weren't limited to 4kb and it wasn't filtering them.

They weren't actually more realistic, developers just chose a different artistic design.