Rowena went down a dark path.
That's why we never hear about her. She's too impulsive, quitting school to run off to New York alone, and inviting her music teacher to go with her. She went to New York, got in with the wrong folks - ended up pregnant or drugged out or even dead - there are aspects of the scene in New York that will chew up a young, pretty girl, no matter how talented. Mr. Holland assumes she worked it out, but instead she disappeared into oblivion from his vantage point, or he knows what happened and distances himself from it as an Old Shame, feeling guilty for not taking her home or telling her parents.- He did arrange for her to stay with a married couple who were friends of his. Presumably if something bad happened to her, he would have heard something about it.
Lou Russ's death was a valiant Dying Moment of Awesome that saved most of the platoon he was in.
Mr. Holland brought out the best in his students, after all. The titular opus being good, but unremarkable, is the point.
Mr. Holland's true remarkable skill is his ability to connect with his students and instill in them a love of music that stays with them long after they leave his classroom. The is demonstrated with the fact that all the now-adult students can still play well, meaning they kept learning and practicing after graduation. That message would be lost if the piece played in the finale was truly amazing. It almost wouldn't even matter if the composition was complete garbage (although it might retroactively flip the entire film from a drama to a comedy...)