Art Director of the game here :)
The 2D characters were really quick placeholders I made during the prototyping phase, so we could have something that represents the states of the characters and have it more testable. I love games like Don't Starve (modded it for years!) and Knights and Bikes, that have 2D character a in 3D(-ish) environment, but we knew that our strenght as a studio is in 3D assets and 3D animation. We also wanted the characters to have mhm...volume in the world for game feel reasons for this particular game. Would love to return to 2D sprites sometime in the future tho!
As for the river, it uses three watercolor textures (underwater ground, earthy shore and snowy egdes) plus a scan of cling foil, that we snatched from the kitchen for the water surface. The setup allows for light passing through the "water" surface. Maybe you saw the path texture in the outro being repeated to make the pathways? The river is that just a bit more complicated^^.
Thank you for playing and commenting :))