So you are forced to do Jaree-Ra deeds by putting out the fire so the icerunner can purposely crash which leads the a bunch of bandits to raid the ship and kill all of the workers.

Theirs a dialogue part where you mention about telling the guards, but never give the option to truly tell the guards of what Jaree-Ra is up to. I would really had liked to do that part since my Altmer character (when in RP mode) is a pretty decent guy.

By telling the guards I think IMO should be counted as helping the people in Haafingar and given 1000 gold.

An option to work against him would have been nice. However, I liked his sister. She was just as much of a jerk, but I liked her.

I skipped his little assignment, found their hideout and cleaned them out.

Yeah, I hate that once you talk to him you're pretty much stuck with either doing the quest or having it in your journal forever. I made the mistake of talking to the innkeeper in Solitude trying to get a lead-in to some other quest, and he mentioned Jaree-Ra and then I had "talk to Jaree-Ra" stuck in my journal and I knew the only way to do that was going to get me stuck with Lights Out as well. Fortunately I'd just entered Solitude so I was able to reload the Autosave and skip talking to the innkeeper.

@ Celan: is there any way to have Jaree Ra be in the hideout without actually progressing through the quest and sabotaging the lighthouse? Because it seems like just outright killing him before you do that would be the only way to "fail" the quest and get it out of your journal. The first time I did it I had already found the place and cleared it before ever talking to him, and he was still hanging around the inn offering the quest even though his gang was all dead.

Jaree-Ra is an essential character, so you can't kill him until the quest.

I killed his sister before she had dialog and attacked me.

However I never followed through with telling a guard about him. Seemed against the nature of my master thief.

That happened to me on my most recent character, but I didn't catch it in time. However, I sort of roleplayed my way through that ordeal despite my character being a goody-two-shoes for the most part. She supports the Stormcloaks, so my reasoning is that my character is helping him out in order to disrupt Imperial supply lines, but only because he assured her that the sailors would be fine. Once the quest goes bad, my character will - guilt stricken - do the East Empire Company quest in Windhelm in order to atone and help the fallen sailors' comrades. That way I get to knock off two quests and my honorable Stormcloak roleplay isn't ruined. It's a bit of a stretch, to be sure, but it's better than having an uncompleted quest marker in my journal forever. I can live with the one for the Thieves Guild, which I'll never join with this character, but I want as few as possible.

I did the same thing with my last SC character, I hadn't officially joined them yet, but had probably started the process and just not reported back after the first little test of my resolve. So I rationalized it once I got it by telling myself it was supplies intended for the Legion. With my Legion character I just didn't care, she was an amoral little thing who'd was already in deep with the TG and the DB and had no reservations about joining the Legion even after knocking off their commander in chief.

Well, i havent played a totally good character before, so i usually just do the quest anyway. Though this shows yet another quest that could have a different quest progression really hopes bethesda gives more choices for quests rather than making most of them linear.

It is odd there is no option to destroy them and tell the guards.

I do the quest, they're all dead after it, so all good.
I would'nt object it they did'nt turn on you and you could work with them. My characters ar'nt that fussy who they work for, sometimes.