I also took the opportunity to play through Legend of Zelda due to the Ambassador Program...my will was weaker than yours, though, I resorted to a walkthrough a few times. That said, I found the original Zelda to hold up surprisingly well in a lot of ways.
I agree that the game is at its best when it's presenting a steep but not impossible challenge; and, to its credit, there are mercifully few parts that require you to read the designers' minds. The open-endedness of the game's structure was pretty cool - I like the idea of Hyrule as a single place open to exploration, rather than the assortment of discrete areas introduced with the transition to 3D - though the notion of being able to play through the dungeons in any order is better in theory than in practice: I think I played Dungeon 3 first, then 1, then 2, but my attempt to tackle Dungeon 6 after that just met with a lot of frustration. In the end, I have to admit, the aspect I enjoyed the most was just seeing the roots of later (and, in my opinion, better) Zelda games. For example, I had no idea that the side-scrolling dungeon sections from Link's Awakening actually had precedents in the original game! There's a lot to like here, and the fact that a game this ambitious was created for the NES in 1986 is just a marvel of design; but for me, the things about the Zelda games that I cherish most weren't entirely there until the SNES days.
Anyway, I still have the second quest to play through, which I'm sure I'll do one of these days (maybe around the same time I finally get around to playing the Master Quest on OoT3D); right now, I'm also dabbling in Zelda II, which is every bit as hair-pullingly difficult as I remembered it being!