New to cryx!

The problem with that reach 4 Berserk is mostly the MAT 6 and Terminus having no way to do anything about that (excepting standing there, but then he might as well take out the infantry by himself). If this is your cup of tea, I would suggest Skarre 2 with a Kraken in Slaughter Fleet. Black Spot is semi-Berserk and it fixes the hit modifier.

Personally I do not like your list. There are too many points in the Sepulcher and it doesn't do that much for Terminus, while Terminus doesn't do much for it. Soulhunters are indeed decent, but without support they only mulch light infantry. Terminus can't support them (and they're too fast to get Tough) and they steal his souls on the feat turn.

To answer your specific questions:
Darragh is a great dragoon and putting Terminus's threat level at 12 is valuable. That being said, I also never feel like shelling out 9 points for him: that's a full unit of Mechanithralls or a min unit of Bane Knights, whom can serve as Terminus fodder, so the -2 damage for living is also less relevant.

In theory the Iron Lich Overseer with a Seether is the best unsupported damage output we have in faction, but the package is very expensive at 18 points and relatively easy to shut down by knocking down the Seether, or turning it around. On the other hand, the ILO is the only source of Dark Shroud in this theme, so you might be tempted to put a light on him just for that. But then you are still paying a light jack +5 points that could go into more infantry to protect Terminus.

1 arc node is definitely fine for him in my experience as you are right about his play style. The arc node is just there for the occasional Hellfire or Annihilation.

It is rather hard to answer your question about fun without knowing what you really want from the list and what your preferred play style is. Could you maybe tell us what it is you're looking for and what you have available? We'll be happy to help you find your way into the service of the Dragonfather

To be honest, I've put it on the table, I think, once in MK3, so my opinion may be biased. If I do play a colossal, and Cryx colossals are sometimes hard to justify, I prefer the Kraken, because it is a decent mixed arms platform, while the Sepulcher is always stuck at P+S 19, though the guns are better overall.

If I were to play it again, I would use it as a gun platform and get as much used out of the Impalers as possible. This means using casters that support that kind of play style such as Skarre 2/3 and Denny 1/3, perhaps Mortenebra. Actually I think the list you have would work ok with Denny 3, but you can afford to drop Darragh and 1 arc node in favour of more Brute Thralls and maybe an extra Pistol Wraith or Necrosurgeon.

A question regarding recursion and the wording of things. If something kills a thrall with take down, it's removed from play and any effect that says "return" in it, such as the spell revive, cannot return that model. What about effects that say "add" instead? Like the sepulcher says add, so these are entirely new models and not old ones brought back, right? This gets around takedown?

Yes, "add" means new models, so it doesn't matter what happened to any other model in that unit, as long as there still is a unit to add to, obviously.
"return" indeed means it's the same model, so if it has been removed from play, it is impossible to return it. Returning a model means it is exactly the same model, which means if it already activated that turn, it can not do so again, if it has already used a once per X ability, it can't do it again for that X, etc.