Cultural treasures have to be handed back or compensated. The zainichi is a question of human rights in Japan. They demand wholehearted Japanese support in the struggle for Korean unification. They also reject the Japanese arguments that money has to be given directly to individuals concerned and serve people's needs, not to be diverted into palaces or military purposes. Japan is not in a moral position to dictate the use.
Negotiations flow better with all issues on the table, in no order.
The two points about how money is used may be accommodated by Japan giving to infrastructure and social services. But DPRK also feels that Japan is not free to decide, does not dare be ahead of the USA, and searches for pretexts. Only Japan can prove that this is not true. The two Kims showed the way in the historical 15 June meeting.