I think it has a better concept, but is still lacking in execution. The events here feel too similar to what other villains have done in the past, namely Tirek and Sunset. Personally, I would've stuck with the time traveling gimmick, but I would've changed a few things.
1. Starlight can still alter the time spell, but show that it is incredibly difficult for her to even perform the basic one. There might be an entire episode just montaging her trying to figure it out. It was established in the first episode of season 5 that Starlight was not on the same level of magic as Twilight. Keep that consistent.
2. Show that Starlight has tricks up her sleeves when it comes to magic, not raw power, and show Twilight adapting to those tricks. Twilight should be the most powerful unicorn in all of Equestria, full stop. At alicorn level, no one short of Starswirl should be able to come close to her power. Starlight would need to keep Twilight on her toes with various different types of magic. She should not be fighting the princess of friendship on an even playing field.
3. Different backstory. Have something bad happen to Starlight due to cutie marks, but don't make it something as simple as losing a friend. That's just stupid. Even a life filled with bullying like in the example you presented, would work.
4. Do not completely reform Starlight, but still start her down a path of redemption. When Starlight sees the damage she causes to the future, she should realize that going to such an extreme solution is not the way to go, but she's still not convinced that cutie marks are a good thing. She lets go of her grudge against Twilight, but instead seeks a less extreme solution to make her point. This way, she can eventually become a force of good and we get to see her journey to it.
5. And finally, do not let anyone forgive Starlight (save maybe a few like Twilight or Celestia). She did wrong on a massive scale. She should feel the social consequences of her wrong doing. There doesn't necessarily need to be official consequences, like time in Tartarus, though that would help.