The Ethnologue: Languages of the World guesses 850. On the one hand, the Ethnologue is best placed to know, since it is published by SIL International, and the SIL has the missionary linguists on the ground, who far outnumber academic linguists. On the other hand, the Ethnologue is consistently a splitter not a lumper. 850 is the best estimate that we have, but it is still an estimate on the high side.
Any literacy in PNG has been introduced by missionaries or linguists speaking a Western European language, and I am not aware of any PNG languages with a script other than Roman.
The languages of PNG belong in two groups: Austronesian, which are recognisably related to the other Austronesian languages of Indonesia and the Pacific; and the Papuan languages, which were spoken before the Austronesian languages arrived. We do not have sufficient evidence that the Papuan languages are even related to each other as the same family; we just lump them together as pre-Austronesian.
There is abandonment of tokples (indigenous languages) for Tok Pisin, Hiri Motu, and English; but I don’t have information on how rapid it is.