Would you go with this venue?

That is a tricky one. I'm not sure it's a case of price v ethics unless the venue is actually seeking to make money out of the venue's notoriety, and it sounds from your comment about low prices, as if the notoriety is actually a hindrance. What is more of an issue is whether the reduced cost is worth upsetting guests - or potentially having them decline coming.

It's difficult to say how many people would be put off without knowing the venue/history, but if your mother is so upset that she's unwilling even to look at pictures of the venue, I'd look elsewhere (unless she's the drama queen type who is going to make a fuss about everything). You really don't want your mother feeling anxious and upset on your wedding day, and if the mere idea of the venue is creating this reaction, I doubt the look of the venue, however beautiful, is going to win her over.

I doubt many people would be put off attending a wedding because of ghosts. I guess the problem is more likely to be that if people have died horribly at this venue in the past, some guests may find it difficult to attend a wedding in a place where people suffered terribly. It's why houses where serial killers have murdered so often get pulled down.

If it's bothering you enough to wonder about it and assume people would be hesitant coming then maybe that's your sign not to go ahead with it. If you think it will be fine then book it, If you and your partner love the venue then that's all that matters. It is a very tricky situation as everyone has a different preference so you can't make everyone happy, if you do end up booking you will have people that wouldn't want to come, but if the people coming are out of town and they know nothing about the venue and if it truly looks great and is not spooky they won't be that bothered. If you truly think that more than half of your guests won't come because of the venue then definitely don't book it.

Speak to the venue also before you decide, express your concerns, enquire how many weddings they have had booked, or events., they are trying to change the reputation of the venue, give them the benefit of the doubt.

However, I would say, for us we went ahead and booked a venue that we liked and my mom wasn't very supportive of it (she thought it was a waste of money despite it being cheaper), the area also is not very great but it was the cheapest we found. So we went ahead and booked it, will think about the rest later on. So yeah, that's all I can say on it.