I am on the 360, so no mods or real knowledge of them. As for the Honorhall, yes, you have to kill Grelod. I haven't done that because I (so far) won't be forced into something like that!
While I take a certain pleasure in killing Grelod (she is pretty much the only character, human or non, who I will normally murder), I agree that the adoption system in Hearthfire is flawed. There are two reasons, in my opinion.
1. It not only forces you to murder Grelod, but it forces you to initiate the DB questline. And if your character can't handle Astrid in battle, it essentially forces you to commit
another murder after that.
2. It doesn't address the sticky issue that Constance probably knows that you murdered Grelod.
I actually created an alternate system awhile back, before Hearthfire was formally announced; it went something like this:
Dragonborn enters orphanage, asks to adopt a child.
If Grelod is alive:
If you talk to Constance, she explains that you have to talk to Grelod.
If you talk to Grelod, she refuses outright.
Dragonborn:
[Persuade, easy] "Come on. You obviously can't stand the kids. I'll be taking one away from here."
[Bribe] "How about an 'adoption fee'?" (Leveled number of septims)
[Intimidate, difficult] "I'll bet Constance would let me adopt if... something happened to you."
[Friendly with Jarl] "I'm in tight with the jarl. Maybe I should tell her how you're treating these kids."
Grelod caves, tells you to work it out with Constance. Constance asks you some questions, your name, what you do, if you have a house, etc. My version presumed that you had to be married to adopt, and I didn't think to ask about houses, but that's minutae. The point is, if you have appropriate accomodations, you can "go meet the children" and choose the one you want to adopt.
If you have killed Grelod, Constance reminds you that she saw Grelod's murder and is aware that you did it, and expresses her deep concern about entrusting one of her angels to you.
Dragonborn:
[Persuade, easy] "Grelod was a horrible, evil woman who abused these children. I did what I did to protect them."
[Friendly with Jarl] "If you like, we can talk to the jarl. I'm sure that she'll vouch for me."
(Bribery and intimidation will not work, since Constance is a good soul who will always act in her children's best interest)
Again, Constance asks you the same set of questions, with the same ultimate result.
Same end result, but no murders required. And given that I am an everyman with no video game design training/experience whatsoever, I would think that the professionals at Bethesda could have come up with something like this as well.