The plus point is that you have a captive audience and a lot more punters than would normally be in the venue.
It happened to us a couple of gigs ago, it was a couples wedding anniversary in the pub/restaurant and we had a great night.
For the sake of keeping a happy band and the landlady not willing to budge on only wanting a three piece, I personally wouldn’t bother with the pub, it’s only a gig and not worth the hassle.
The other side of the coin regarding your last sentence is a lot of the new stuff has no relevance to folks who were really into the music produced thirty years ago.
I remember years back we used to do Two Princes by the Spin Doctors, if we happened to play it just slightly faster, the vocalist couldn’t get the words out fast enough to fit.