I wonder if deleting the whole household and sims with it is a good idea....
No, it's not because anyone else in the neighbourhood who has interacted with your Sims now has BFBVFS problems of their own.
I just don't know if I should just re-install the whole thing so that it doesn't make me a sad panda in future.
You don't have to reinstall, just delete the neighbourhood. If it's a Maxian neighbourhood you can always get that back in the default state too.