I always had a thought that Rooter did see Littlefoot make it to the Great Valley. Yes, this is a crazy theory, but it seemed to me that the narrator was also the voice of Rooter, so I always pictured that Rooter did follow Littlefoot and the others, but never intervened because he knew Littlefoot had to do this on his own. Because of this, I always imagined that Rooter was the narrator the whole time.
Again, it's just a theory, but it's what I came up with.
In terms of his character, it's a real shame that he was added in solely to soften the blow of Littlefoot's mother's death, at least in the producers' minds, but I like others here agree that his advice to Littlefoot really can expand to kids in general. I don't know how many kids have experienced the death of a loved one when they first see this movie, but it does provide an insight as to what going through life after said death really feels like.
I agree that Rooter shouldn't come back in a sequel because then the purpose of his character is kind of lost. Having said that, I always like to think that Bron is speaking about him when he tells Littlefoot that somebody told him about Sharptooth. When you think about it, who else was there to see Littlefoot's mother die, and Rooter was the only one Littlefoot spoke about her to, at least right after her death.