Time is fine, especially if NPCs have their own schedules, etc. There wasn't much difference in DD between night and day, besides lighting, but it was nice to have. Weather and seasons would also help with atmosphere.
Not needing to eat or rest may be unrealistic, but requiring them could be tedious, depending on how it is implemented. I've played games where there were health penalties if you didn't eat, but rather than add to the realism, it just meant you had to stop by a store once in awhile and buy 99 loaves of bread and 99 pieces of meat for each character.
