Just caught up on the last episode and boy it made no sense to kill Laurel at this point. Was it due to contractual obligation or something?

No.

This episode was so frustrating because they put n the grave scene at the beginning of the season with no plan of who would be in it and then it's just decided alright let's kill off Laurel even when the general perception from a majority of people watching the show is that Felicity should have been the one to go.

Guggenheim is messing with this show too much now and he insists he doesn't care what fans think but he responds so positively to any questions made about Olicity.

The first 30 minutes of the episode was the best the show has had in a long time because it actually had strong choreography, an actual thrilling plot, oh and a concentration on the core group instead of being Felicity and Friends. It actually gave a strong look at how the show would have been if Berlanti still had a strong presence over the show.

Even if Laurel's death is a fake out, which seems likely (even though Guggie says it isn't but he's always told the truth with this show) it is still dumb because they have spent so much time messing with Detective Lance losing daughters and not dealing with Canary head on. Hopefully Earth-2 Laurel joins Season 3 of Flash as a regular.

Olicity is definitely ruining the show and at this point don't be surprised if Felicity becomes Black Canary. I'll stick with the show just for the link to the other universe shows but this is going to be hard to come back from.

Is Guggenheim a genuine Olicity fan or is he just giving in to the rapid shippers?

They are also raising money for Guggenheim after this episode as like a thank you. Seriously.

The latest episode was a snoozefest. I'm not going to drop this but can they get new writers for season 5 please?