Observation is inherently a process with time. Without time, observation cannot be done. I’m not sure how observation without time could even be done, with the goal of observation being the measure from one state to another.
Perhaps you are right, it is we who create time to observe.
In general it seems like attempting to live in human society without memory is a pretty traumatic experience. Or it would be, if you could remember experiencing it.
It's also very hard on the people around you.