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I've tried using LocalStack for mocking AWS services locally, but it's never worked quite the way I want it to. At this point I just set up "local" versions of the resources I need in a non-prod account and set up the service to use those when I'm developing.

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Right, I do that too.

The real problem is the development lifecycle for a lambda. It's a constant loop of changing the code, building it and then invoking it. This process takes a bunch of seconds even for the smallest change in a tiny code base.

It's much slower than writing code and immediately going to a browser to reload to see the changes which is something a lot of dev environments were able to pull off since about 1998.

If you edit the .aws-build folder directly you will get instant results without having to build. I am sure it is not a best practice.

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