hey, when I tried to pickpocket the priestess, she found out, sounded the alarm, etc... anyways, I killed her, the guards, and the 4 outside of the temple... should I continue on, or restart and try to pickpocket her again?

(don't want to be an enemy of some powerful organisation or god )

If you wait until night time when she is sleeping, she takes the necklace off and puts it beside her bed. That way she won't call the guards on you.