Wow! I haven't gotten to the end of the demo yet (died shortly after the island, then stopped to make lunch) but this is a huuuuge improvement on the original. Better gamefeel, atmosphere, exploration, etc. It reminds me a lot of Alan Wake 2's exploration with the more action-y combat of Alan Wake 1.
I'm probably the target demographic for this demo because I was so intrigued by what the game wanted to be, but disappointed by the janky state it released in. There were so many bits of dialog that hinted at cut ideas or parts of the game that had to be left out to meet deadlines or budget. Even lines that made it sound like Daniel and Martha would run into other characters along the way. (Daniel's line about the Police Station boss haunts me. The one that makes it sound like a character they had met previously transformed into the monster.)
This demo is a bittersweet look at what could have been. Even if nothing more comes of this, I'm glad you were able to rework at least part of the game.