I like in game consequences for taking too long. "QUEST FAILED" is really "DEVELOPER COULDNT COME UP WITH ANYTHING BETTER". If you don't complete an objective in a timely fashion it should alter things without being a "screw it, I'm just going to reload" moment.
Didn't make it to the Castle in time to ?whatever? Well now you have to rush to a deep dark dungeon and you'll have another chance to ?whatever?.
Altering rewards for timed completion works too. Or, god forbid, we could even fork the entire plot (or subplot).