Well actually it makes some sense, from the Sage's explanation we know she was/turned out pretty evil and cruel, this could be her punishment or penance. After all she was beyond powerful and there is no real knowledge what happened to her. One of Hagoromo's sentences seems to indicate that his mother was stronger than him or the Shinju/Jubi. And she just died of old age? That seems far fetched.
The only other plausible theory I heard till now is that she is in fact the Jubi after the Shinju overtook her body.
Well for the linking characters to Kaguya, this can also be attributed to the fact that we know nothing of her origins and her "death". People like to speculate on her (and the Sage's brother), now that we know so much on the Sage.
I still support my Ultimate Unified Kaguya Theory: She is a timetravel Hinata who ate the fruit in the future, was took over by the Shinju later on to create the Jubi and her soul created the Reaper. Yeah that is bullshit, but at least the story wouldn't have any loose ends^^.
