This has been discussed many times over the years in this thread and across every travel message board.
I have lived here for six years. This happens countless times per year. Kim Jong Un puffs his chest out, American media freaks out, but life goes on in South Korea.
I received email from the Embassy today that they are continuing with a normal schedule and life goes on as normal. I certainly am going on with my normal life. I'm more worried about my daily schedule and weekend plans than North Korea when I wake up.
Personally, the American media has nothing to do but ratchet this up for the 24 hour news cycle. The Korean media reports it, yes, and it is important, yes, BUT it is not affecting daily life. I'm currently sitting in class on a break from teaching, kids aren't thinking or talking about it.
Kim Jong Un is a rich man in a poor country. He's not going to give that up. He also knows if he did anything, he'd be blown away in a matter of seconds by his allies and the US in Korea and Japan.
If you're really that worried, it's up to you to cancel your tickets, but I think it's a big mistake. You'd be missing out on a great trip.