Any Willow sequel that went into production now would almost certainly need to be set decades after the original.
One also assumes that her connection to the man who saved her life would remain strong, which is why Willow as a character would remain important in a sequel.
As such, that also means that Elora Dana, the character who was as an infant in the first movie, will have grown up.
At least if it expected to actually include the character played by Warwick Davis it would.