cool game! I love roguelikes and word puzzles, it's cool to see them combined. Reminds me a little of a puzzle game called Lingo, where you have to solve word puzzles; the format is somewhat similar, but not exactly the same.
The hard modes seem terribly difficult at the start of the game, especially if you skip Terry. I think for a full roguelike, the difficulty of the game will have to progressively increase. What if instead of banning letters, you only started with a few and the game progressively gets harder by adding more letters into your hand? You could also try making a no-repeats mechanic, where letters can only be in the word once until they get debuffed (and can repeat any number of times). You could maybe have themed rounds too, like with words only relating to science/animals/medicine/general words/etc. Just some ideas that I had off the top of my head.
Excited to see if you continue this project!