Steve, you and I are a lot alike as gamers. I love games like Mist Survival, Vein, The Infected, and even SurrounDead... I love them so much I have to ban myself from them while developing my games so I don't get pulled in and time warps.
There are 2 top things that feel off to me in all these games I've played throughout the years:
1. If I see something in the game, I should be able to use it, interact with it, destroy it, and even create it if i have the in-game means. Things in the game should always matter even if mattering means they should be destroyed or repurposed logically. And it needs to make sense. Something exists in the world because it has a history that brought it to that spot.
2. Purpose - I need to have an existential purpose in the game. It can't just be survive. It can't just be craft. That will get me maybe 10 hours of playtime before I lose interest and stop caring. I need to feel like everything I do is for a reason and building up to something more. Maybe something bigger than myself. So there is an existential component I need.
A narrative can provide purpose, but not as an after thought. The narrative needs to be the tip of the story of what created the world as it is in the moment you enter it.
To give you a concrete example, the Log Cabin. Why is it there? How was it built? What is John Walker's connection to it such that he knows where it is and that it's a safe haven? Who is John Walker.
These are the questions I ask myself before I even build anything.
Some of the answer are hinted at but not outright said, for example:
1. The cabin is a hunting cabin, built by someone who chopped down trees around it. And you can see this in game because there are a lot of stumps around the cabin.
2. John Walker is a forest ranger, responsible for this area of the Teton mountains, including this hunting cabin which he stocks with wood occasionally for any hunters planning on staying there. The shed in the back he stocks with provisions, this is why he knows all about it and why his inner dialog doesn't spell it out for you in an exposition dump... he already knows these things so he reflects on them as a matter of fact rather than an "as you know" type of dialog.
But what he hints at is just the tip of what we know, and I have it all sketched out so that I'm not making things up as I go (another pet peeve of mine with story creators).
I've probably over-thought everything involved in the creation of this game, so we'll see where it takes us.