That sounds great! The only thing I'd really want to add as a option is the ability to use a created npc skin for the nemesis. Not sure if that was part what you had in mind, but it would add a nice layer of customizablility and partial distraction while fighting in my opinion if you catch my drift 😉.
You might possibly even consider making the skin default to the skin of the first npc you kill unless manually changed or no npc is kill up to that point.
As for the visual difference, you might consider having crystals poking out of the body like the skeletons do, implying a transformation had started taking place in a former island resident.
Other than those suggestions though, I think it sounds spot on! I definitely get wanting to finish other people's requests first. Again, I'm glad to see you're still working on stuff for this game.
I also want to once again extend an invite to the Discord if you'd ever feel like promoting your work directly to that community, I know that you'd definitely be warmly welcomed. https://discord.gg/bz7t7xkdC4
Anyway, looking forward to seeing what new life you continue breathing into Archipelagates 😁!