I haven't finished the demo yet (just got the winged boots, haven't been able to beat Morboss or the trainer at the peak of the West Passage yet), but I think I've played enough to get my thoughts in.

I think the monster mechanics and the combat in general are really solid, with a surprising amount of strategy behind them, and battles are moderately challenging in a mostly fair way. The fact that almost all moves have multiple effects is something I really like in particular, it helps a lot in preventing combat from boiling down to "hit the other side as hard as you can". And the artstyle is pretty charming, even as someone who isn't particularly nostalgic for the original Game Boy.

However, I do have several gripes that ended up making the game significantly less enjoyable for me:

• The walking speed feels really slow. Traversing the map is rather tedious until you get used to it, and even afterwards it amplifies a lot of the game's other issues. It also makes finally obtaining the Running Boots only to find out they have a cooldown (which is understandable considering their secondary effect of preventing random encounters) pretty frustrating.
• There appear to be some important mechanics that the game doesn't really explain, like the specific strengths and weaknesses of each element or the way speed works, and while I was able to figure out most of them on my own it might be wise to spell them out somewhere for other players. Additionally, some of the move descriptions are outright misleading, like Huge Splash claiming to hit all targets in the same (implied vertical) column despite hitting targets in the same horizontal row instead.
• There's an oversight that makes it so clicking the tab menu button or anything within said menu will also interact with any nearby objects in the overworld, presumably due to both being mapped to the mouse's left button. With NPC shopkeepers in particular it will end up opening their shop menu within the tab menu, which is really distracting.
• As far as I can't tell there's no way to heal your monsters outside of combat or a bench except for the donut, or to revive them at all outside of a bench. If your team is significantly injured from a tough battle, which most battles in this game seem to be, and you don't get a free heal like in the first Arena, you're almost guaranteed to lose the next battle and the only other option is to walk all the way to the closest bench and back, which due to the slow walking speed is pretty tedious. Exploring the map and levelling up your weaker monsters can both become rather tedious and frustrating as a result.
• There's seemingly no indication of at what level or under what conditions your monsters will finally evolve, not helped by evolved monsters regularly appearing both in the wild and in other trainers' teams at much lower levels than yours. This contributes to the above issue to make training some monsters even more frustrating.
• Maybe this is me just being bad at the game, but wild Morkulv/Morkor packs feel ridiculously dangerous despite being so common. Sneaking in general is really strong and superior to Bite in every way, with the "drawback" of being unusable after Howl being nullified by other Morks being able to Howl for them and raise their Strength anyways. I don't see how you're supposed to prevent them from outspeeding everything on your team, ignoring your tanks to gang up on and quickly demolish the frailer monsters in the backline, and disabling your attackers with bleed and fear status, beyond overleveling or blind luck.
• A minor example, but while the inclusion of a button to reset the boulder puzzles is highly appreciated, it appears to reset every puzzle in the entire room. This can be a bit frustrating for the Air Temple in particular, where solving one puzzle then messing up the other one forces you to redo both of them.

Overall, I think this game could use a lot of polish, but the underlying idea is still very promising and I'm interested to see how it develops from here. I hope this feedback helps.