9/11 as a national holiday: No. Like Cream said, eventually the meaning would be lost and it would just become an excuse for department store sales. Plus, I think it sends a more powerful message to the terrorists - yes, they've hurt us, but we're picking ourselves up and going on with our lives.
Reparations: I'm not sure precisely what the victims' families are getting now, so I can't speak to this.
What to do with the site: My initial reaction was that the Twin Towers should be rebuilt as they were. I'm not so sure about that any more. Something should be built - it's prime real estate and NYC could use the office space. Maybe 4-5 buildings of 60-70 stories each would work. But there also must be a memorial. The WTC complex had a wide open plaza; I think something like that, with a memorial garden and possibly a wall inscribed with the names of the victims, would be fitting.
Munchkin03, I had the same experience as you... I also saw ground zero from the air. A couple of months after 9/11, I had to fly into LaGuardia. We were put into a holding pattern over the East River. I saw the Empire State Building go by and I knew what was coming...