That looks great! I like your big sprites, how's that going?
I was also thinking about implementing a cooldown timer the same way, so nice! I don't have magic or multiple items in my game (never figured out an item selection menu and just decided to roll with it), so I never bothered pursuing those options, but those are both great ideas, especially magic consumption. Another good option might be having a very short dash available at the start, and upgrading it throughout the game to be faster, longer, have a shorter cooldown, use less magic, etc., and designing that to be a fundamental part of your game.
I think whether or not you have the dash as its own item would have a lot to do with how you intend the player to use it in combat. Is combat designed around the player being able to dodge enemy attacks, or is this just an add-on? I've found (to me) that Link to the Past's combat isn't amazing. I image it was great for the time, and it's functional if enemies have a wide variation of different movements, attacks, patterns, weaknesses, but it's never great (maybe some bosses might reach that level). Hopefully, with abilities like dodging, an active shield (like Link's Awakening or Minish Cap), and different enemy behaviors, we can make combat more engaging for a modern audience. Side note, I think the game Blossom Tales went a long way toward more engaging combat just by not freezing the hero when they're attacking.