I am assuming that LA is the Waste Land, the barren place, now. Lilah's wound (unhealed? healable only by death> made her the Fisher
King as well as the femme fatale and this is not a good combination. Angel has become more and more the Arthur - the ruler of the physical realm whereas Lilah is ruler of the spiritual one - and yet, crucially, they are both in a sense dead and alive. They are both beings that exist as the threshold of two realms and this is not healthy for the place that takes its name from Angel.
It is no longer clear that he is trying to seek redemption - the Powers have been revealed as tricksters on whose promises he cannot rely. This is particularly true if, as seems likely, Spike has been the ensouled vampire who shansued. The antagonism between the two is going to be made worse by Spike's teasing - even back in Becoming Part Two, when Angelus failed to make Acathla waken, he chanted 'Someone wasn't worthy, someone wasn't worthy'. Imagine what he is going to be like now, when he is having to cope with being human again and mortal and weak.
Spike is Angel's son, in a sense, and there will be the edge that 'The father will kill the son' might refer to him. Particularly since Angel and presumably Lilah will be the only ones aware any more of that particular prophesy, since Connor never existed for most of them. Which also has the effect of no-one quite understanding why Wesley was estranged.
I am not sure about this subtraction of memory plot because Connor's existence had so many consequences. I fear that this particular piece of meddling by Angel will make things worse rather than better because there will be colossal inconsistencies in everyone's memories. Particularly if the ghost of Darla turns up from time to time or if Cordelia awakens.
On the other hand, the editing out of Connor pairs him very neatly with the edited in Dawn, which may mean that they are banking these two disturbed teens for later use. After all, if we are going to get Dawn Worldwalker at some future point, Connor would be useful muscle. I still think that DW would be a cool show, even if I am in a minority of one.
I want to endorse Jen's view that a Drusilla arc will be important at this point. Cordy will wake, if she does, incredibly alienated from everyone and near mad from being a passenger in her own body while Jasmine created mayhem. As a member of a class - mad seers - consisting of precisely two, she is going to feel for Dru.
Also, in her role as unpalatable truth-teller, Cordy pairs neatly with Spike and I hope Charisma will be back just to get the Cordy/Spike snarkage at the expense of gray Angel and Lilah. Drusilla was, even Angel thinks, Angelus' greatest crime and somehow he has to find a way of putting it right and completing the Fall of the House of Aurelius - and Cordy and Spike will both be on his case about this.
What I cannot work out is what Giles will be doing in all this. Except I suppose borrowing all the W&H books to copy them for the New Model Watcher's Council.
Gosh, I am looking forward to this.
Meanwhile, nose less sore, working hard, going to a party, more later.