Death in game: Does life go on or do you revive your sims?

For me it depends on the circumstances and the sim's point in life. For someone just aging to young adult, I would exit without saving in most cases. I have let them go when they were adults and not too far from elder stage, kids all grown up, etc. Plus, it does feel like it wasn't meant to be in your case since they had gotten rid of the hysterical emotion.