It would be nice for immersion... but it could be annoying if you are back in Cyseal at 2AM in the morning after adventuring, trying to buy your tome of [insert skillbook name], and Cylia is like "F* off, I'm trying to get my beauty sleep"
That's true. Even so, I remember nighttime fondly in Ultima. I wasn't as annoyed shops were closed because it was expected and it was neat to see people going about their evening routines. Plus, Larian could add a "pass time" function in case you wanted to rest until dawn so the markets were open.
Day and Night adds more uses for clocks, watches, and personal light sources as well as the opportunity for quests and other plot devices which happen only at night.
They might need to put night watchmen on patrol in Cyseal, though, or stealing all the stuff laying around would be too easy!
