I understand the arguments against it - that some children have chronic conditions that inevitably lead them to miss school, and it will make them feel left out/bad.
But to be honest, schools by theor very nature often reward things that aren't totally in students' control. Prizes for those who do best in their subjects for example, or sports awards. Those who aren't very academic, or aren't very good at sport, or whatever, are automatically excluded from these prizes - no amount of effort would have earned me the victrix ludorum, or whatever it's called, at sports' day because I simply couldn't run fast enough.
There will always be situations, both at school and in life in general, where some people are excluded from prizes and rewards through no fault of their own.....
Our job as parents is to explain this to our children, and make it clear that, while they can't win every prize, that doesn't mean they can't win any..... And help them to focus on what they CAN do.
I like rewarding attendance, personally. At the school I work at only à handful of students in each year group manage 100% attendance, and I actually do think it's a massive achievement and it shows real resilience. It is usually lovely, hard working, committed kids who earn those rewards, and it's nice to see their grit and determination (coming in to school even when they have a headache or had a really late night then night before or whatever) recognised.
When I speak to my form group about attendance I always make it clear that there are some students in the room for whom 100% attendance won't be possible due to chronic conditions, or other events beyond their control such as caring responsibilities, bereavement etc etc. But for those lucky enough to not encounter those issues, 100% is a great target to aim for! This should be made clear in attendance assemblies too, and has been in the ones I have attended.