This is my experience of nikajo in the Mugenjuku dojo here. There is non-painful pressure starting in your arm and all of a sudden your knee collapses. This is not in every nikajo applied here, but in some. It feels incredibly powerful because with pain, you always have the idea in the back of your head that if you could stand the pain, the technique wouldn't work. But this collapse seems to happen as a non-conscious reaction.
Yes. When nage is controlling uke's entire mechanical structure, instead of simply twisting a limb (which is simply pain compliance), nikkyo/nikkajo should be painless. You can choose to apply pain, but that is an additional action, and, IMO, completely unnecessary.