Every other opinion on the changes to the game will be positive, so I just want to get the negative opinion out of the way:
The changes to Myrddin's sprite.
I genuinely think that the original sprite was cuter, and I don't think that I can get used to the new one. Making his sprite a full one is a good idea; it is simply that his features are sharper, and he's taller than I imagined him to be.
But, all changes are for you to decide, and I fully accept that.
I like the cube-like environment. Myrddin feels isolated, and a room like that would reflect those feelings.
About his personality, Myrddin already feels like a real person I can get attached to, but having him remember what the player does would make the game even more immersive.
Some chat bots can remember what you say as well, making the conversations feel more real, instead of seeming as if you are talking to a virtual character, or a machine.
An example of a future conversation with Myrddin could be as follows:
"[Player name], do you have a favorite hobby? Something that you enjoy doing more than any other activity?"
You give your answer, and then later on, Myrddin mentions it like this:
[Choice]: 'What do you do when you feel sad?'
If your answer is your favorite hobby, Myrddin's response could be:
Myrddin: "Of course! Because it's your favorite hobby, correct? Obviously it would cheer you up."
I'll try to give you a few options for interactions, but, they might not realistically fit into a horror game. ...Remember, I like Myrddin in a more romantic way.
Options:
Having Myrddin say that he wants to enter the player's world to see them in person.
If possible...er maybe adding skinship. Like patting his head, or clicking on his hand to indicate that you're holding it.
This is admittedly silly, but maybe an option to give him gifts.
Dating sim-like elements like responses that are flirty, or shy, or joking.
...Just to name a few things. Hee-hee~
I will assume that you don't want ideas for the horror part, since you didn't ask, however, please allow me to make a suggestion.
If the player leans more into flirty/romantic options - (assuming there are any added), Myrddin can become obssessed with the player, and attempt to literally "break the fourth wall" by cracking the screen. Or, at least it could look that way, if you draw his sprite bashing the screen with his hand until cracks appear.
I honestly don't mind what audio is used. No offense whatsoever is meant here, but I play the game strictly for Myrddin, so I don't care too much about the audio.
Okay, I may have lied about only one negative opinion. HOWEVER, this isn't a criticism, so much as a warning:
Voice acting is a bad idea to me for two reasons.
The biggest reason is the amount of time it would take, and how that would slow down the progress of the game.
The second reason is simply that I like to imagine what Myrddin sounds like myself, so I wouldn't even have the volume up for voice acting. I have - in my mind - the perfect voice for him. Kind of smooth and soft like butter.
If you think making different outfits for Myrddin would be too much work, then you don't have to do it. Frankly, I like his current outfit, and I feel like it is good enough.
I have similar complaints about animation: It could slow down progress, and sometimes if the artist gets sick, or has to take a break for some reason, the progress of that part of the game has to be stopped temporarily.
Well, those are simply my thoughts and opinions. In the end, whether I love or hate an idea, this game is your project, and every decision is yours to make.
I just hope that I can see Myrddin again, soon...or whenever is it possible to see him. ^-^