The writers used his death for a reason. They used to it to establish the lengths of what the Guado were going to do under the direction of Seymour. The writiers wanted the ball to hit home more, and it would likely to de-sensitize you to the fact that Yuna would soon have to die, as is revealed later in Home.

It introduces death on a personal level from this point, by showing how death affected your characters, Rikku in particular (as she is the one that they planned most on the player to respond to).

As far as the of Keyakku is in the game, he was probably another brother, or a close friend. They use his character model multiple times throughout the game, so if you have seen him before, it may or not may have been him. For all we know, he could have been Gippal's brother (Rikku likely would have come to know him in her involvement time with Gippal, if she hadn't known him already).

The entirety of the Al Bhed population seemed to be close to each other, as has already been mentioned. His death affected Cid as well.