The frequency of the incoming light as measured by local clocks does change as the result of gravitational time dilation.
I'd describe what's going on as follows. The Earth is to big to be considered as a single inertial frame, even if we ignore the fact that it's rotating , which definitely makes it non-inertial.
You can label the Earth with time coordinates - in fact,that's the job of a coordinate time. But the resulting coordinate system is not an "inertial frame".
Because it's not an inertial frame, the coordinate time differs from the proper time, depending on one's position. In this case, altitude is the important element of position. We call the difference between coordinate time and proper time (the time measured by clocks) "time dilation".
As far as biological effects, some elements of biology will be driven by light and sunlight, but for the most part these effects could be separated out by putting someone in a sealed room and using non-natural forms of illumination. IT doesn't really have anything to do with time, just light.
Once upon a time, the Earth's rotation was the best timekeeper available, but that has long since ceased to be the case. Atomic clocks can and do measure the slow rate of change of the Earth's day, they are fundamentally more precise than the Earth's rotation.
Also note that the solar day was never precisely constant.
http://www.larry.denenberg.com/earliest-sunset.html does a good job of explaining the issues, one being due to the tilt of the Earth's axis, the other being due to the shape of the Earth's orbit.