I would say I’d look back at it as a better game than I do now; however, I feel it would make the game much less memorable (especially considering Spirit Tracks). I feel like the Temple helps me differentiate it from other handheld games a bit more.
I doubt it would change much. I hardly remember much Ilia did in the later parts of the game, and killing her off wouldn't seem much different. All it would do would be to change Link's motivation from saving her to avenging her and carry that motivation all the way until the end of the story...