Per the last sentence of RRS 35

 If no boat finishes within the time limit, the race committee shall abandon the race. 

If the race committee does not realize that the time limit has been exceeded and publishes it in the provisional results. What is the correct procedure to be followed. Is it enough for a sailor to point out the error for the race committee to take action? Does the protest committee come into it in any way?

In my opinion the RC needs to correct the scoring, which per the rules they can do at any time.  They don't have any leeway here as they SHALL abandon the race.  No wiggle room.  

Per 90.3 (c) When the race committee determines from its own records or observations that it has scored a boat incorrectly, it shall correct the error and make the corrected scores available to competitors.

To specifically address the questions:

Q1: Unless "TLE" has been defined in the SIs or NOR, no such scoring abbreviation exists (RRS A11).  There is no choice - RRS 35 is very clear, ". . . the race shall be abandoned."  The Race Committee is responsible for scoring (RRS 90.3(a)).

Q2: No.  RRS 35 provides no alternative but to abandon the race.  If the race committee did not abandon, a competitor could request redress - and would almost certainly succeed in having the race abandoned by the protest committee.

As I read rule 35 (absent changes by NOR/SI) if any boat finishes before the time limit, all boats that finish are scored in finishing places.

Wondering what you all think of the following SI:

Aside from not specifically citing a change to rule 35, would this allow the RC to score a boat finishing after 1700 as DNF?

Not sure it is a change to RRS 35, which says ....finishes within the time limit, if any,....  In my opinion this allows you to add finish time or not without changing the rule.  
Not sure I like the wording of the SIs but I take that to mean there is a time limit of 1630, and a finish window of 30 minutes, so if no one finishes by 1630 the race gets abandoned.  If one boat finishes by 1630, anyone who crosses the line before 1700 will be scored in place, and anyone finishing after 1700 will be scored DNF, unless the SIs specify TLE will be used.  

Tim, this is the wording I use for our Beer Can races when we want a drop-dead time for sunset, but also want to allow some gap for handicaps to be in effect:
The time limit for the first boat in a class to finish a race shall be 1940. Boats not finished by 2000 will be scored DNF.  This modifies RRS 35, A4 and A5.