I agree with all of your facts.
While the N95 has a 5MP camera, Megapixels aren't everything. The lens is still very small, as is the sensor. For most, a 2MP camera (like the iPhone has) is perfectly adequate.
Where the Nokia does shine is the fact that it has a flash and better settings for the camera (well, settings). Hence, for taking lots of pictures with it, the Nokia is a better phone.
But comparing a list of specs is mostly pointless. It's what the guys at Sony and Nokia are doing right now... their phones have got a camera, check, a bright screen, check, games, check, notes application, check, etc. What they don't seem to realise is that a list of features is missing the point. It's how the features are put together that's what counts.
The iPhone has blown all other phones out of the water not because it has loads more, or even better features, but simply that it does some simple stuff very, very well. Thanks to its great interface. Sony, Nokia et al. seem to be blind to this.