You need to talk to the car hire company and to the hotel about their flexibility policies.
They are well used to living and working on islands in the North Atlantic, so they know the inherent problems that brings.
With one flight on the Sunday it is pretty unlikely that it is not going to run for lack of passengers- supply has been tailored to demand.
That is especially so if visitors are booking seats on small aircraft 7 months ahead- so pushing up the dynamic fares for the locals who are not able to book with such enormous advance timescales.
Being a Sunday flight, if the flight was cancelled, then get yourself to Aberdeen for the evening Northlink ferry to Kirkwall- it will get you in at just before midnight. The ferry can sail in many circumstances when the plane can't fly.
BUT Kirkwall is not an easy port to get into, so sometimes Kirkwall has to be omitted and the vessel has to sail direct to Shetland.
In heavy weather I have been as much as 8 hours late on the ferry arriving into Kirkwall, because we couldn't get out of Aberdeen due to the swell at the harbour bar.
Did I complain on internet forum or demand compensation? Not on your life. That day I got to enjoy a rare daytime passage from Orkney to Shetland, at full speed in still very lively seas- more than adequate compensation.
Bear in mind that, if your flight was cancelled there may be capacity issues in the next day or two.
You totally need to be flexible going to somewhere like Orkney/Shetland and not over schedule.
Southbound be prepared for the possibility that you might have to divert onto the Stromness to Scrabster ferry if things went really pear shaped, then make your way back south on the A9- or even stay on Orkney an extra one or two nights.