Most of 4B is, IMO, utterly unsalvageable. But if you wanted to preserve the germ of the Author/Storybook idea, the plot should have been, not Regina trying to get the author to write a happy ending for her, but Regina trying to get the author to undo her own evil actions (she would presumably first have to have some reason to believe that a version of Henry would or could be guaranteed to exist in this altered reality). This would genuinely show the extent to which she has changed.
Henry would be on board with the plan, improving his relationship with Regina -- but, ironically ,acknowledging at the same time how compromised that relationship has been, as Henry cheerfully accepts the possibility of a change that will be for Regina the ultimate sacrifice.
Emma would be appalled; as grim as her life has been, she doesn't want to change the person that life has made her. She would also be highly skeptical of the idea of some external power impinging upon her free will. Hook would fervently agree on both counts. But as, theoretically, Regina's plan is one that will have the effect of saving countless lives, this means that, in this scenario, Emma is really being the selfish one, creating a thorny moral issue far more credible and complex than the tacked-on darkness scenario. The townspeople at large catch wind of the plan, and those of them who lost the most under Regina's reign are furious with their former savior Emma for refusing to sacrifice her present life for the lives of their loved ones, especially as Emma's life would also improve in this scenario.
Snowing would hedge - they'd be on Emma's side, for the most part, but it would come out that the reason that they don't want to change the past is because of their fear of losing Snowflake to the altered timeline; if not for him, they'd be Team Regina because of their remaining guilt and grief over missing Emma's childhood. This throws into relief the complexities of Charming family dynamics, and forces the adult Charmings to work through these complications.
The AU world Isaac and Regina wind up creating should legitimately be, in many respects, a better world. Emma prime should be the one who has to go over and set things right, but this brings her into conflict with Wish!Emma, a strong woman who is every bit as willing to fight for this world as our Emma is to fight for hers. Ultimately, our Emma, though still reluctant to trade her life even for this objectively better one, concedes that this is the world that should live on. But wish Henry -- not knowing that he is the next Author -- tells Emma prime that he'll preserve her reality as a story. Because he is the author of this world, just as much as Isaac is (currently) in Earth prime, this generates two equally valid planes of reality, pre-emptively solving the problem of the ontological status of the wish-verse; by the end of the arc, both realities exist in parallel timestreams.