Below is a quite brutal approach : whenever I see inverses of binomial coefficients, I try to use the following relation between the Gamma and Beta functions (I can provide a link if needed) :
$$\mbox{With } 0 < m \le n,\quad \quad \ \frac{1}{\binom{m+n}{m}} = \frac{mn}{m+n} \cdot \displaystyle{\int_0^1} t^{m-1}(1-t)^{n-1} dt$$
Your sum becomes :
$$S_n = 1 + \sum \limits_{k=1}^{n^2} (-1)^k \binom{n^2}{k} \frac{kn}{k+n} \displaystyle{\int_0^1} t^{k-1}(1-t)^{n-1} dt$$
$$S_n = 1 + n \displaystyle{\int_0^1} (1-t)^{n-1} \cdot \Big( \sum \limits_{k=1}^{n^2} \frac{(-1)^k k}{k+n} \binom{n^2}{k} t^{k-1} \Big) dt$$
Short interlude : we can simplify this sum. Denote $f : t \mapsto t^{n+1} \sum \limits_{k=1}^{n^2} \frac{(-1)^k k}{k+n} \binom{n^2}{k} t^{k-1}$. Then $f'(t) = \sum \limits_{k=1}^{n^2} (-1)^k k \binom{n^2}{k} t^{k+n-1} = t^n \frac{d}{dt} \big( \sum \limits_{k=0}^{n^2} \binom{n^2}{k} (-t)^k \Big) = t^n \frac{d}{dt} \Big( (1-t)^{n^2} \Big) = -n^2 t^n (1-t)^{n^2-1}$.
Hence $$S_n = 1 + n \displaystyle{\int_0^1} (1-t)^{n-1} \cdot \frac{1}{t^{n+1}} \displaystyle{\int_0^{t}}-n^2 s^n (1-s)^{n^2-1} ds dt$$
and by exchanging the integrals :
$$S_n = 1 - n^3 \displaystyle{\int_0^1} s^n (1-s)^{n^2-1} \cdot \displaystyle{\int_s^1} \frac{(1-t)^{n-1}}{t^{n+1}} dtds$$
$$S_n = 1 - n^3 \displaystyle{\int_0^1} s^n (1-s)^{n^2-1} \cdot \frac{(1-s)^n}{n s^n}ds$$
$$S_n = 1 -n^2 \displaystyle{\int_0^1} (1-s)^{n^2+n-1} = 1 - \frac{n^2}{n^2+n}$$
There might (must) be a more elegant way, but with this we can conclude that $S_n = \frac{1}{n+1}$.