So I'm rolling a new assassin that uses Illusion, Restoration, One-Handed, Sneak, Smithing (Light Armor side), (Light Armor or Alteration)

The only reason I'm asking is I really can't decide.

I love Alteration. It's my favorite school of magic, yet I hardly use it for some reason. It has many benefits for a mage assassin. With it, I don't have to worry about perking Light Armor which can save me perks. I can also use robes with flesh spells so I can use those enchants to save on magicka cost. Also, I won't have to worry about getting caught as much since robes don't really make any noise, unlike armor. But if I do this, this means I'll have to take more levels in magicka since I'll be using 3 schools of magic, instead of 2.

I could also benefit from light armor. I can use the full set of DB armor as well as Nightingale (if I decide to go for it). I can also benefit from Smithing since I'm going up that side of the tree. The Wind Walker perk will help with Stamina since I'm dual-wielding. I won't have to use as much magicka with light armor. I'll be able to upgrade armor past the 300 AR that Ebonyflesh + 3/3 Mage Armor will give.

So I'm torn.

Well since you will be using Illusion, I'm assuming you won't be hit that much. I'm my experience, LA levels up so slowly compared to Alteration. But then with your smithing, you can easliy reach the maximum armor rating...this is a really difficult decision.

Id start off with Light Armor, and get better Alteration fleshes then get robes.

I would say that if LA is an option, then use it. You can save on magicka costs for flesh spells, you certainly won't be spending perks on mage armor, and Elven armor weighs little more than clothing. Alteration is still useful for an assassin with detect life/detect dead. Paralyze is also very useful. You don't need much in the way of perks for LA. The first power perk and custom fit are more than enough if you smith you armor properly (i.e. potions, enchants).