Do Instrument Landing Systems restrict building heights and can these be overcome?
This is a fairly interesting case as it crosses international borders. Technically, as a sovereign nation they are free to build and approve construction as they see fit. Depending on where you are in the world this is handled in all kinds of different ways. Blocking the runway of another nations airport may not be great for international relations but there is nothing stopping them from doing it. There have been some fairly infamous real estate holdouts that test the limits of what you describe.

As for the latter part of your question, there have been instrument approaches that don't necessarily point you right at the runway initially. as @mfarver notes in the comments the classic example of this is the old approach into Kai Tak Airport which basically pointed you to the side of a mountain. The mountain face was painted in a checked pattern, when it came into view a right turn was executed and you were lined up with the runway. The approach is no longer in use but has been pretty notorious, you can see it in action here. With the prevalence of GPS approaches coming into use all sorts of things can be done that cant be done with a traditional straight line radio signal ILS. The issue with your described approach is that the airplane lands on the runway in the reverse direction which may not always be possible with the current winds. 

The other option if things do get in the way is to have a really steep, slam dunk style final approach as they do in St. Barts. This, however can lead to other issues.