I don't have a problem with Pussy Willow, and it's in the dictionary. I'd probably avoid using "pussy" in the book title, but as the title of one of the stories inside a book that is obviously for children, I think it should be fine.
As for the death thing ... I can imagine some people might have trouble with it, but as you say, there are plenty of examples in classic fairy tales. I don't think there is a general rule here, it's really going to come down to whether you get it right in the story (no pressure
). I think you will probably have to write it first and decide later whether it works.