I've definitely considered the unhappy ending possibility. It seems quite likely, but it'll be interesting to see where they take it.
I don't think he should have said what happened to Koholint. I know it's an old game, but that's an incredible ending.
Really, Zelda games have always been very bittersweet and tragic. While Link usually saves the world (though sometimes, like in Link's Awakening, you wonder how valid your victory is), he very seldom gets any recognition for it. He leaves Termina, in Wind Waker he prevents the danger before it occurs (and hardly anyone knows), in OoT the danger he stopped never happened. He's always alone.
This one will just be a little more desperate and hopeless, a bit more obviously tragic (though Nintendo always handles subtlety really, REALLY well, so I think it'll be very well done).