The military was afraid of a repeat of Korea. US leadership knew that if a full scale invasion was launched, the Chinese and possibly the Russians would retaliate; Beijing made this very clear. The US was not willing to entertain the idea of calling a bluff after Korea, and certainly not interested in getting into a conflict with the USSR.

The goals of the war also need to be understood. The US simply wanted to stop communism from spreading across Asia any further, because at the time most of the leadership believed in the "domino theory." The rhetoric of the time was that if Vietnam fell to communism, the surrounding countries would all quickly follow suit. They chose Vietnam as the place to make a stand. The reasons are complex and too much to go into detail here, but check out Sacred War: Nationalism and Revolution In A Divided Vietnam by William Duiker if you're hungry for an in depth analysis of the reasons for the war from the viewpoint of all three major parties. It's an amazing book and provides insight into the Vietnamese side of the war, which many books on Vietnam are lacking.

The idea was to set up another system like in Korea: allow the communists to control the north and set up a first world loyal government in the south. Completely eradicating communism from Vietnam was never really a priority nor the final goal. The war began as simply providing aid to the South Vietnamese government in defending itself. Eventually what was supposed to be a simple bolstering of defenses grew far out of control, and America became morally trapped as it was clear if they withdrew support the South would almost immediately fall. This is why the Vietnam War was so sinister and continuously ground up good young men for over a decade. The US leadership was stuck and could not lead an assault to decisively end the war without starting a bigger one, nor could they withdraw in good conscience and leave an ally to die

The Vietnam War is a classic example of conventional vs assymmetrical warfare. The US dropped more ordnance in Vietnam than in the entirety of WWII, with little to no effect. You are correct in that the US had a clear advantage in conventional force -- however that advantage can only come to light if your opponent likewise seeks pitched battle. Vietnam was not developed enough for there to be valuable infrastructure to attack. What factories and industrial facilities did exist were simply packed up and moved to either more remote or more heavily defended areas. The North Vietnamese concentrated most of their AA defenses around Hanoi and other major cities; the casualty rate for pilots was much higher in those areas. The terrain in Vietnam is highly defensible, perfect for defense-in-depth. Not to mention that many Vietnamese soldiers were crack veterans, having fought the French, and even Japanese during WWII. China also attempted a conventional invasion of Vietnam after a newly unified Vietnam invaded Pol Pot's Cambodia -- the invasion was repelled without Hanoi diverting a single regular unit from Cambodia. In other words, peasants and irregulars beat back a conventional Chinese invasion. Tl;dr Vietnam is damn near perfect for hard-countering conventional warfare. Source: North Vietnam's Strategy for Survival

It seems that the US military had the military power to flat-out crush the North Vietnamese in conventional warfare. Why didn't the US invade Hanoi, severely disrupting the communications and logistics of any Communist-affiliated forces?

In US Air Force basic training, we are taught that President Johnson placed restrictions on the USAF bombing targets, preventing them from targeting industrial infrastructure like refineries and factories, and that led to much of the military's ineffectiveness in Vietnam. But when President Nixon stepped into office he lifted the restrictions and, had he not been under enormous pressure to end the war, the lifting of these restrictions would have quickly turned the war back in the US' favor. Is there any truth to this, or is this an attempt at minimizing blame on the US military's part?

Follow Up Question:

Did the same limitations apply to the French (in their previous war), fears of Soviet/Chinese retaliation for unrestricted warfare?