First off, I think Pedro will be fine. I'm not sure whether he actually does crank it up a notch - that sounds more like a commentator cliché to me. If you look at his splits for the season so far, he's allowing a significantly higher average with runners on base or in scoring position (both .244) than he is with none on (.205), so I'd discount this.
The trade offer is interesting. Depending on your scoring, it's probably close enough in value that it depends on your needs. If you can afford to lose Pedro, A-Rod would look awfully good in anybody's lineup; if you need to concentrate on pitching, stay put.
Castillo versus Alomar is interesting - I'd take Castillo right now, actually, unless sb's don't count for much in your league.