I think it would be pretty sweet if this was the next Hyrule Castle area in the next game. Hyrule has shrunken down to just a valley kingdom. Small towns dotting suitable living areas around the capitol city. The waterfall maybe called Zora Falls or Veil Falls. The lake beyond the waterfall being Lake Hylia.
And the are beyond the main road that leads to the capitol is a vast wasteland of Old Hyrule.