Screw it. If you kill a NPC they are dead. There are only a small handful of quests that are required so I just need to protect those NPCs. If you go around killing NPCs then it's less quests for you.
@grumpygamer in the original Fable, you could break into people's houses at night and murder them in their beds. They would never respawn and were just gone after that. Not sure if it was a bug or designed this way, but I was basically able to depopulate every town in the game. It got lonely.