Well it would be kind of boring, in my opinion, if everyone originated in the city region. I can get my character there, I would just like to know more about the Rito clan-- or, rather, your version of it. Valoo was pretty integral to their race and culture, so... if he's not there that's kind of a big deal. Valoo may be susceptible to death-- that's true-- but Wind Waker seemed to hint that he and the other spirits didn't have a regular life span. He spoke ancient Hylian, after all. I don't really see any reason why he wouldn't still be alive.

Considering how far society as a whole seems to have come, wouldn't it be interesting if there were some Rito that forsook their heritage and made the decision to live without Valoo's scales to grant them wings because that meant they would have had to swear loyalty to him in a sense?