Ooh, that's a tricky one because sugar does a lot. It helps with structure. It helps with moisture. It helps with tenderness. People add applesauce or any kind of fruit puree or something. You could throw that in there. It's going to affect the texture though. It's not going to be as good. Yeah, you can develop too much gluten and that's going to make for a tough cake.
When it makes contact with liquid and then heated, baking powder produces carbon dioxide gas and the gas forms bubbles that get trapped in the batter's structure. As the cake bakes, the bubbles expand, causing the cake to rise and become airy. Without baking powder, the batter relies only on mechanical aeration (beating, whisking eggs, creaming butter/sugar), which is not enough to give the same height and softness unless the recipe was designed as a foam cake.