Portable digital camera with high quality sensor and optics

Question

I am looking for a portable digital camera with the following specific requirements.

Requirements

1. Must easily fit in a pants pocket. The smaller the better. Maximum size: 4.5" x 3" x 1.5" (smaller than that is better).
2. Must have image quality and sharpness that is noticeably superior to typical point-and-shoot cameras. I'm intentionally not stating it has to be a 1" or larger sensor because I am open to all options. I want to get DSLR quality images out of a small camera (I'm interested in the result, not bragging about sensor size.)
3. Under $500 USD (on sale price is fine)

Preferences (none required)

1. A nice zoom range. I'm flexible on this, but more range (starting at a nice wide angle) is better.
2. Optical view finder
3. Manual exposure settings (in addition to automatic)
4. Manual focus (in addition to automatic)
5. Water resistance or even waterproof
6. Good battery life (at least 250 photos per charge)
7. WiFi

Not needed (okay if it has these features, but not needed)

1. GPS
2. Image editing within the camera

Answer 1

You might want to look into the Nikon 1 J5 camera. It is a DSLR grade pocket camera with interchangeable lens. MSRP of this camera is USD$499.99 so it should cost less in stores. Features:

• Interchangeable lens using the Nikon 1 mount
• MASP (Manual, Aperture, Shutter, Programmed Auto) modes
• 20.8 Megapixels
• 13.2mm x 8.8mm sensor size
• WiFi & NFC
• 3.9in x 2.4in x 1.3in size