By "Mughal élite" it obviously included large part of indigenous converts, being a pastoral/semi-nomad group, like the Arabs had to co opt the Syrians during the Umayyad and the Persians during the Abbassid dynasties, the Mughals couldn't run a State/administration on their own. In this "Mughal élite" was also included the Pashtun mercenaries.
The denial is on the part of those who think that all Syed's, Mughal's, ... descendants are basically fake, which is a common trope in Hindu nationalist narrative if you bother following it, and for whom even Afghans are ex-Hindus for that matter.
And yes we have more in common with a Hindu of our ethnicity, but the point you miss is that the main ethnicities in Pak (in descending order : Punjabis, Sindhis, Pashtuns, Baloch) are not represented by 97-98% of India either.
We should see Pak as what it is geographically to begin with, an intermediary zone which was always open to foreign influences (the Gandharan civilization gave rise to the first image of the Buddha specifically because it was open to the Greek figurative art), and these foreign influences included Mughals, Persians and Arabs, on a cultural as well as genetic level.