When Naruto said that he doesn't wants to kill Sasuke, he meant that even if they battle violently to the end of their breaths, Naruto has no intention of killing Sasuke. Though he'll defend himself from Sasuke because he does not want to die and let Sasuke suffer alone which he's planning to.
And since Sasuke is trying to go all out to kill Naruto, Naruto has to UP himself to defend against Sasuke.
Even at the end of chapter 696, Naruto said that he'll go all out to defeat Sasuke, NOT to kill Sasuke. Going all out doesn't mean that you must kill the loser to be held as the winner.
I realize your post is the main post for those who are discussing the thread. However, your post is very wrong, and only Sasuke fanboys will appreciate it here. The truth is, Sasuke has proven to be very weak and all his fanboys are proving to be in great denial. In order to answer you, I will start by the argument that I underlined in your post:
1. On underlined argument:
Please show me the page in last chapter where Naruto says he will go all out? Otherwise, shut up and read the manga. Sasuke himself know Naruto is holding back, and he thought Naruto was all relying on Biju chakra. Now, he realize that actually all natural energy is there for Naruto, and
Sasuke is the one who claimed that Naruto is getting serious. This does not change Naruto's statement that he does not want to kill Sasuke - which means he is not going to use lethal attack on Sasuke - which means he is holding back.
2. Only people who are either blind, or are not reading this manga will not see my point. Ask yourself why Naruto is not using lava release, magnet RS, and all the other element. Ask yourself why Naruto is only aiming at Susanoo? Can you even compare this fight with Naruto's performance against Kaguya?
My point is, Sasuke is lame, and it was the same for Madara against Hashirama. Their own powers are useless, and even with Biju power, they are still useless. On the other hand, Ashura and his reincarnation are unbeatable even without biju power. When they add Biju power, they simply go to supersayan mode.