My understanding is that every theorem $\phi$ of $PA$ is true in $N$ because
- $N$ is a model for $PA$, $N\models PA$.
- By completeness of first order logic, "$PA\vdash\phi$" implies that "if $N\models PA$ then $N\models \phi$".
Hence $\phi$ is true in $N$, $N\models \phi$.
But I was confused upon reading the following from Godel's Theorem: An Incomplete Guide to Its Use and Abuse, p31:
We know that there are consistent theories extending PA that prove false mathematical statement ... So we have no mathematical basis for concluding that (say) the twin prime conjecture is true from the two premises "PA is consistent" and "PA proves the twin prime conjecture".
According to my understanding above, "PA is consistent" and "PA proves the twin prime conjecture" are enough for concluding truth of the conjecture (in the standard model). Theories extending PA may prove false theorem (relative to the standard model), but surely this is not the case for PA?
First a minor remark: I personally prefer to refer to the implication that you use in (2) as soundness and to reserve the term completeness for the other direction. It takes no Gödel to prove soundness ;)
You are correct in the mathematics before the quotation. I think the point that the author tries to make in that quotation is merely that the truth of theorems of PA is not a consequence of the consistency of PA. He does not question the truth of theorems of PA. Note that you also never invoke the consistency of PA in your argument, but the (stronger, because of soundness) statement that the natural numbers are a model. Indeed, as Franzén points out, if you have a statement $\phi$ that is true in $N$ but not provable in $PA$ then $PA+\neg\phi$ is a consistent theory that proves $\neg\phi$, but this does not make $\neg\phi$ true. Truth is not a consequence of consistency.
And by the way, I think that this is an excellent book.