I really like the idea that walk and work speed could be effected by sleep/fatigue - although walk speed made add a lot of difficulty in gameplay (say if you find yourself "suddenly tired" and the controls don't feel right just as you about to take on a shotile mob for instance).
When I started VS I didn't know what the Temporal stability was and I was calling it (to myself) "cognition" - perhaps too little sleep could start draining that as well perhaps and good sleep acts a boon? ... Oh wow, yeh, just read the line where you put that suggestion too lol.
Also, I hate that Temporal storms are forced onto the player - my style is all about preparedness to survive - would much prefer it if they only visited by game mechanics that the player could adequetly do something about (like getting good sleep).
I like the idea as a whole in general - the only idea I don't like the waking up at dawn no matter - I think fatigue is a good thing but I think the waking up mechanic should include things mechanisms to allow the player to get woken up (like by a rooster or something) - the quality of bed slept on should determine how good of a sleep the player got.