The tail wags the dog, surely, with small majorities. This is why May has called an election. There will be no electoral pacts (different in any case from things like the liblab pact, which was a parliamentary one)
As for who would lead Labour again there are plenty of viable candidates but most are keeping their heads down. Corbyn is a double whammy as not only are many of his policies dubious but he is also useless as a leader. But I suspect he'll relish the canpaign: a chance to get away from parliament which he seems to care little for anyway, and get out into the country to preach lots of the converted and convince himself he is on a roll.