This is just mechanically a Rage spell, which is already in the game. No point in redundancy.
As far as illusion goes, I like to look into spells of past games.
I Morrowind, for example, the illusion school had spell effects like Blind (which reduced the chance of an enemy to hit an opponent), Night Eye (let the caster see in the dark without a light source to give away their position), Sanctuary (making the caster harder to hit), Silence (rendering enemies unable to cast spells), and Sound (which creates a disorienting noise in the afflicted's head and reduces an enemy's ability to cast spells. Oblivion also had a Darkness spell effect, which enshrouded a target or the player in darkness, although the spell was never implemented in game. In these earlier games, spells that manipulated light (chameleon, invisibility, light, darkness) all fell under the illusion school. The game of Daggerfall also had Polymorph, or the ability to change shape, as an important spell in the school.
Since they no longer work with Skyrim's mechanics, spells like Blind, Sanctuary, and Sound might be implemented in other ways. You might be able to get Blind to force archers to miss the player, and maybe with Sound you can implement a illusion variant to the "Throw Voice" shout. Polymorph is fully possible in Skyrim. Perhaps changing the player into burial urn (to throw off pursuers) or a draugr (to blend in).
Speaking of blending in, a great illusion spell would be a spell that, when cast upon a target, adds the player to the target's faction(s) for a brief period. That way, you could walk through a crowd of draugr without garnering any ill-will. I would just extremely limit this - since it is basically an OP version of the Calm spell. In fact, you might tie it to a polymorph spell, so the spell has some visual representation.
Another possible spell would be to erase your memory from people's minds. Namely to get guards to forget who you are. Another possibility would be to create an illusion spell that "fogs up" the players face. So people don't recognize who you are. If you're familiar with Nocturnal's Cowl, from Oblivion, I bet you see the advantages to such an effect.