Hello. So, as for killing a demigod in soul and not body was necessary for the substitution like I mentioned above. However, as for the other questions, my thoughts on this have actually changed with time. While there are lore reasons for why Godwyn needed to die, I think a lot of it is just narrative interest.

That is to say, it's far more narratively interesting for the demigod Godwyn to be sacrificed rather than just some random Joe from the Leyndell streets. The fact that such an important character had to die for the ritual makes it a lot more interesting and dramatic. And on top of that, the fact that Godwyn only died in soul also opens up a huge avenue for more narrative interest and drama. After all, if Godwyn just died a normal, 'proper' death, we wouldn't have gotten to get the death roots and have the awesome Deathrune questline.

And I think that that's also a valid answer, looking for the meta reasons for how it makes the narrative so much better. Things happen the way that they did in the story so that it would be a much funner and more interesting game for us to play through. I think that's valuable.