That is a difficult and complex question. I think that Nikyo does tend to hurt. It is a wrist lock after all. However, the pain should not be the goal of the technique. What you should be aiming for is a structural collapse of uke.
I have seen and learned variations that don't hurt at all, such as this one by Shishiya sensei.
I have felt him do this technique, and it definitely works, but it is unconventional, and I definitely consider it to be a variation.
The nikyo I aim for uses the classic nikyo form, but creates the same structural collapse as Shishiya sensei's technique. It hurts, but uke doesn't drop because of the pain, but because of the structural collapse.
As for how it is practiced in Aikikai, there are so many teachers teaching so many different things that it is impossible to say. For instance, Shishiya sensei is technically in the Aikikai, but he has a very unconventional nikyo. I think some people do rely on pain compliance to make this technique work, but I think that is the wrong approach.