Random Person
Just Some Random Person
If done correctly, it could be fine. Really, Zelda just needs some decent continuity. Fans went gaga when they heard the temple of time song in TP, showing it's connection to OoT's ToT. We don't need a whole game of that, the hate for TP being proof of that, but moments that remind us that the series is connected is a great way to spark up people's inner nostalgia. And a quick and painless history session would hurt, emphasis on QUICK AND PAINLESS.
From what I read in HH, the City in the Sky is still a mystery in regards to the timeline so it's safe to say it hadn't been seen in any game prior to HH.
I'm not sure about Palace of Winds (assuming you mean the MC version), but it can't be Skyloft. City in the Sky was always the city from the Oocca tribe, a.k.a. the Sky People
From what I read in HH, the City in the Sky is still a mystery in regards to the timeline so it's safe to say it hadn't been seen in any game prior to HH.