"Possible worlds" doesn't mean spawning any physical universes - it's a convenient shorthand for imagined possible worlds, which we (in our capacity as intelligent apes) compare against each other, usually as part of a consequentialist decision process.

Whether or not possible worlds are 'as real' as the actual world is a different question from whether or not "possible worlds" equal "imagined possible worlds. The answer to the second question is almost certainly "no". For a world to be possible it is not necessary that someone imagine it.

The basic idea is that death being bad is, at its root, a function of the decision-making bits of our brains. This can be seen not just from a priori claims about "low utility = bad," but from the structure of what Shelly Kagan hunts around for, which mainly involves choices between possible worlds.

The causal history/ cognitive explanation of the idea of death being bad is not the same as a justification for it. It of course makes sense that humans would have evolved to worry more about not dying than about not having begun living earlier. But the normative question is about what we should value and why. I tend toward the non-realist camp myself so I'm tempted to answer "there isn't and can't be an answer to the normative question". But if you're worried about the behavior of very powerful agents trying to extrapolate human values the question of whether or not "death is bad" is inconsistent with our other values and beliefs is important. I thought the article was a rather good survey of the major arguments regarding this particular value question, though, if it hasn't had it already, the subject would benefit from a cognitive science based approach.