We have a very precise definition of time: a second is "the duration of 9,192,631,770 periods of the radiation corresponding to the transition between the two hyperfine levels of the ground state of the caesium-133 atom". It is used in a lot of physical equations which are very accurate at describing the universe as we observe it.
There are some philosophical questions regarding time. Questions about the arrow of time, entropy, causality, etc... For instance we may have trouble relating time and entropy, but it doesn't mean both of these concept are not well defined by themselves.
Yet, historically and practically the notion of 'time' has always been tied to a clock - the daily cycle, the change of seasons, etc. For example, when people said, "time has passed," they meant a certain number of natural cycles - days, seasons or years. The abstract, "theoretical" time, untied to any clock, is a relatively recent invention and, in fact, very well may be a fiction.
Of course relativity also complicates things with time as well. Whose second? Even if you have two different caesium-133 atoms monitored, one on earth and one on a satellite they won't rise at the same rate although both are defined the same.
I guess the real "illusion" would be that if there is truly nothing to be a frame of reference there is nothing for time to "flow" relative to.
There are some philosophical questions regarding time. Questions about the arrow of time, entropy, causality, etc... For instance we may have trouble relating time and entropy, but it doesn't mean both of these concept are not well defined by themselves.