So, am I wrong to assume this will, if at all, only be used against defenseless targets, such as political/civilian targets, as show-of-strength to justify the massive budget and "whoa thats cool"-factor (which, to be fair, it has)?
In a potential Taiwan conflict, when would either side use nukes? China wouldn't use them unless they believe they can't successfully take Taiwan without them, but who would they use them against? Nuking Taiwan makes their newly-captured territory worthless, while nuking the US will start a chain of nuclear escalation that probably ends in MAD. The US wouldn't use nukes unless they believed that they couldn't defend Taiwan without nukes, but Taiwan and the US have been investing heavily (as evidenced by this new ship) in making Taiwan defensible, and besides that, Taiwan's value (like its cities, chip fabs, etc) are vulnerable enough that they can be destroyed without nukes. Neither side wants a nuclear war.
Both sides had poison gas in WWII, but nobody used it.
It's good to be able to counter China without having to go to nukes to do so.
Is any threat from China fabricated? Depends. Are we going to defend Taiwan, or not? If we are, then it's China who's "fabricating" the threat.