That ending felt like a series finale

Season 6 might focus on Kreese on the run from authorities. Although some very informative sources on here have confirmed that Jessica was always secretly working with Silver and will take over his operations while he is in jail. She hated her cousin Amanda so she set her up with Daniel. Season 6 will be a very emotional season

It definitely felt like a series finale. The only things that haven't been resolved are what Kreese will do now that he has escaped prison, and who Tory's parents are.

I think Kreese will find that his girlfriend is still alive, and he will reconnect with her and become a nicer guy. Maybe even make amends with Daniel and Johnny.
Tory's mom is almost certainly going to be Hilary Swank. She's pretty much the only character who hasn't returned and they've been playing this out since the second season.

Otherwise, I have no idea what next season will be about. Everything else has been resolved.

I hope they do stop it there because the start of Season 5 had a "jump the shark" feel about it, between Miguel's Mexico trip and Silver the supervillian. They ended it nicely though - those last 3 episodes had enough shout-outs to the first 2 series to suggest that it was a finale for the entire show - showing Robbie and Sam in sync on that water platform, Eli referencing Kyler's earlier bullying and the fact that he seems to be the only one who hasn't moved on or grown etc, and as the OP says, even Kyler and co seem to turn their backs on Cobra Kai at the end.
Other things that made it feel very final - we also saw Amanda, who'd previously been opposed to Daniel's quest to shut down CK, especially when things turned violent, now fully support him and was even there at the final fight.
Even the Kreese/Silver flashback scenes had brought us more or less to the beginning of the first Karate Kid story, so much so that they'd have been better off de-aging Kove again rather than using the younger actors.
There's only Freddy Fernandez that I can think of who hasn't come back and it wouldn't be worth another entire series just for that cameo.
As for Kreese, for me that was yet another throwback reference, showing him faking his death once again - what a perfect way to end it.

Well, there's Julie from KK4, but Hillary Swank said no one called her, plus she's pregnant right now. Of course, there's Michael Ironside, but who remembers him as a KK villain?

My guess is probably a NEW villain will emerge, related to the international tournament (maybe some follower of Kim Sun-Yung, if not the old man himself). The girl, Kim Da-Eun, might still be around, since she didn't went to jail. But also Cobra Kai could still exist with Kreese managing it from the shadows.

The way the wife and I saw it was that they did wrap the series up in case they finished before getting renewed. As you said, the villains were defeated and the bad kids were redeemed.

Letting Kreese escape could be either a foot in the door for another season if they got renewed (they did) or even just a little humorous end gag if the series ended. I mean, it's not like Kreese won - he's an escaped felon - where can he go? Even if he's exonerated by Silver's conviction (and Stingray's confession), he's still escaped from custody. I don't know the ramifications of escaping even if innocent.

In any case, writing another season would seem to present a big problem. If Daniel and Johnny become enemies again, it will seem so soap-operish and contrived. What's left unresolved, the Korean tournament? Chozen and Kumiko?

I think after wrapping all the arcs, the writers will earn their bucks if they can pull off an interesting and entertaining 6th season.

I was surprised they defeated Terry Silver so easily, he’s a fantastic villain and it felt like they’d nerfed him at the end. I hope the creators find a way to spring him from police custody.

If nothing else, Kreese needs to get his revenge on Silver. I doubt they’d let that thread drop.

As far as Kreese goes, while he escaped from prision, remember that he was wrongfully imprisoned to begin with. When he escaped, he may have beat up a few guys in the process, but i don't recall him killing anyone. The authorities know he's inncocent because Sting-Ray recanted, and it appears that Silver isn't disputing that he was the one that committed the assault. So in light of all this, I can see law enforcement maybe just letting Kreese go, and Kreese trying to pick up where he left off. After all, he's innocent.