Thank you for playing! I definitely struggled balancing Stage 1 the most throughout development. It's hard to find a sweet spot of letting the player gain enough time to loot things quickly versus overwhelming with enemies-- and of course, having later stages increase the amount of enemies spawn to add to the difficulty, and such like that. Things like the Smokey shrines and AO-Chan are there to help mitigate that and make Stage 1 go a little faster, and a typical run should end on Stage 3 (Immerred being Stage 4), so the balance is designed around that. Looping is mainly for fun or if you feel your build isn't quite where you want it at to fight Immerred.
I do plan on a small content update post-jam just to add in the remaining enemies I wanted to during the Jam but didn't have time for, as well as some touchups to Immerred's stage and some more room prefabs.