Gold nanorods (AuNR) can be tailored to possess an intense and narrow longitudinal plasmon (LP) absorption peak in the far-red to near-infrared wavelength region, where tissue is relatively transparent to light. This makes AuNRs excellent candidates as contrast agents for photoacoustic imaging, and as photothermal therapeutic agents. The favorable optical properties of AuNR which depend on the physical parameters of shape, size and plasmonic coupling effects, are required to be stable during use. We investigate the changes that are likely to occur in these physical parameters in the setting of photothermal therapeutics, and the influence that these changes have on the optical properties and the capacity to achieve target cell death. To this end we study 3 sets of interactions: pulsed light with AuNR, AuNR with cells, and pulsed light with cells incubated with AuNR. In the first situation we ascertain the threshold value of fluence required for photothermal melting or reshaping of AuNR to shorter AuNR or nanospheres, which results in drastic changes in optical properties. In the second situation when cells are exposed to antibody-conjugated AuNR, we observe using transmission electron microscopy (TEM) that the particles are closely packed and clustered inside vesicles in the cells. Using dark-field microscopy we show that plasmonic interactions between AuNRs in this situation causes blue-shifting of the LP absorption peak. As a consequence, no direct lethal damage to cells can be inflicted by laser irradiation at the LP peak. On the other hand, using irradiation at the transverse peak (TP) wavelength in the green, at comparative fluences, extensive cell death can be achieved. We attribute this behavior on the one hand to the photoreshaping of AuNR into spheres and on the other hand to clustering of AuNR inside cells. Both effects create sufficiently high optical absorption at 532 nm, which otherwise would have been present at the LP peak. We discuss implications of these finding on the application of these particles in biomedicine.