I think the Israeli's at that point wouldn't really care what a bunch of Arabs would think, in exchange for a important area to defend Israel from and launch invasions if necessary into three neigbours. Plus they grow good apples.
Yeah. The big problem with the Golan is that it's a picturesque mountain range that just happens to be a great place to launch artillery rockets from; with the extra height, they can hit quite far into Israel.
As to Israel taking Damascus...not on a permanent basis. Not that they want it, anyway: Israel doesn't want to annex more Arabs. In fact, the main reason they annexed all the land in '49 and again in '67 (and the Sinai a couple times, though there's a little more to that story) was to have greater defensive depth. Honestly, Israel conquering Damascus is kinda like the United States conquering Mexico City: probably possible, but they'd have a hell of a time holding it, and why do they even want it?
At the most intrusive, they might attempt to install a puppet government, but they'd probably just give it back. I'm not even sure what they'd ask for in exchange, because the Israeli government trusts Syria about as much as they can throw it (which isn't very far considering it's a decent sized piece of land).
On the other hand, the Israeli's ass-kicking of Syria might prevent the latter from trying to puppet Lebanon when the civil war comes up, which will later allow the Israeli-backed Christian militias to overcome the (not Syrian back in this timeline) PLA, leading to shorter Lebanese Civil War, with Lebanon ending up as an Israeli ally/puppet - possibly with Israeli occupation in some of the south.