Respawning after dying is more of a multiplayer thing, not really a single-player thing.
Also, reducing your stats on death and only getting them back after doing something else would at best be annoying, and at worst it could lead to a never-ending cycle of losing stats because you died because your stats were lowered because you died because...
More drops from enemies would be good, because you definitely need to spend a lot of money at a store.
I don't like the idea of cluttering up the game with HUD elements like a skull or an aura. And by the way, it was not actually possible to avoid going near Damian, and he does not even attack you at any point, so it completely eludes me why you think adding an aura is needed.
