"It would make his Triforce of Courage mean something."
I disagree here. The Triforce pieces are associated with those individuals who most possess those attributes. Courage is the primary aspect of Link's character just as Power is a primary aspect of Ganon and Wisdom is a primary aspect of Zelda. Also, courage and fear are not at odds with one another, and I think we witness fear at several times in the series. Any time Link falls and cries out, he's experiencing fear. There is fear in Link's expression when he first meets Ganondorf, but courage is demonstrating strength and determination in the face of fear. By definition, one cannot display courage without fear. Also, as others have mentioned, it would be very awkward to have a storyline that reflects a lack of courage, while the player is running through dungeons slicing up baddies.
So, to answer your question, I'm not particularly interested in greater character development than what we already witness in games. Technology has allowed for more intricate body language and facial features that give us an indication of how Link is feeling, so I don't really agree that he has a lack of emotion. We never see him break down and cry because he's afraid to fight a Skulltula, but would we really want to? As far as strict character development, I believe that Link develops in the minds of players even if there are not many literal developments in the game. When the Great Duke Tree tells Link about his mother leaving him in the woods, or when Lanayru recounts the story of the battle for the Sacred Realm, those stories affect Link the way that the player is affected by them. Link grows stronger in each tale. His relationships with other characters change over time. Link is not a completely blank slate, but he does largely function as the player's avatar, and I think that is great.