I believe that if SP was the first movie made on a bigger budget, it would get a lot more recognition then it does now, but that it would be nowhere near as loved as TLK is. Why?
Well, lets face it - at the age of the target audience of the movies, children find it far easier to understand the love between parent and a child, rather then actual romance. I believe that's what makes TLK so popular to begin with, there is love, alright. but it's not the center of the plot.
The second main point action that's always present in TLK. The plot is very dynamic and almost every scene has a purpose, and the overall movie doesn't get stuck on one genre like SP that pretty much concentrates on Kovu and Kiara getting together.
Having that said, I still believe SP is one of the better - if not the best Disney sequel out there. Characters are developed and original, plot and music are decent, animation is... alright, the conflict is similar to the one in the original, but doesn't let it show... Sure, there are some plot-holes and problems here and there but all in all it's a positive experience.
Of course, some alterations to the plot would have to be made. If there was no TLK, some of the characters original to that movie would have to be ignored in favor of more important ones to the plot. For example, Simba wouldn't be the protagonist we all know and love who later became a father, he would merely be the father to the protagonist. We probably wouldn't even see all that much of him in the movie, and there wouldn't be any need for us too sympathize with him, either. Just like Mufasa is mainly known as Simba's father and a wise character in the original, while Simba is far more sympathetic and easy to relate to.
Speaking of whom, I doubt Mufasa would even get directly mentioned, put apart shown as a ghost. Disney tends to keep their character count as small a possible, and they also restrain from mentioning names that aren't needed or relevant to the plot, in order not to confuse the audience. That's why we never heard the names of Mufasa and Scar's parents. Besides, come on, we all know the reason for us not being scared of Mufasa's ghost is because we know fully who he is, and that his appearance will be helpful. If Rafiki would stop every now and then to talk to some 'Mufasa' ghost guy we had no idea about, it'd be pretty creepy.
As for Scar - I believe he'd simply become that one lion who tried to steal the crown at one point - either from Simba or his nameless father. There would be no point in making him and Simba related, and therefore Kovu would probably be his biological son. All in all,. it would be fairly similar to that one cartoon with blue and red foxes.
Now I wonder what TLK would be like as a prequal.