Hey its Pakistan so how come you think of traditional night life. But you can do it here in the local way. Go to main bazaar which is the most happening place at night. Lot of activity goes on at that time. You would see many people moving around bazaar.
The ideal place for people watching is the open air area of Hilal's. You can enjoy your dinner and later coffee at the same place. Afaq is the other most busy place but its not ideal for people watching.
Alternatively you can arrange a bonfire at the plce you are staying, have some Barbeque and enjoy the night life of Nathia Gali. Some times Greens hotel arrange Bonfire on weekend so its not a bad idea joining them for barbeque where local singers entertain audience with live songs.
Dress Code: Weather is chilly at nights so better wear warm clothes.
If in the middle on the night. when you're sleeping in your hotel and you are suddenly woken up by a rumbling sound which sounds pretty much like a B-52 Bomber just threw a Bunker Buster into your hotel, just relax and try to go to sleep again. Its one of the several thunderstorms that hit Nathia Gali and they last almost the whole night. The power may also be cut for as short while so bring a torch as well. Beautiful view though of the lightning flashes, nice chance for some photography.
Dress Code: You'll probably be in your night suit.