I see that an undead character getting a live body back is up to the player, but if I opt not to that means that he's effectively immortal, just not in a regenerative sort of way. Would I need to do something about that or nerf that somehow?

Link/LoZ is mentioned by name in the faq a few times so I'm assuming someone on the mod team is familiar, but for reference; The Hero's Shade is the restless spirit of the Hero of Time who stuck around after death through a combination of regret, paranoia and straight up stubbornness. He has both a semi corporeal skeleton/ghost form that he uses to fight and train Twilight Princess Link in, and a spectral golden wolf form.