Interesting, and thanks for reporting. Forgive me, but I do not understand in what way the filetype is affecting your translation efforts. Could you post a screenshot that illustrates some of your issues?
Also, some people have posted Chinese translations for previous versions in the discord. It might be worth looking at those to make sure work isn't being done double
For example, when a character becomes pregnant in a game, gray text will be displayed under that character's portrait, such as "sparktail_womb_notice_text0". The text cannot be displayed in full because the game cannot wrap to another line, but this problem is not observed in English.
I impregnated two NPCs in different languages within the game. It can be observed that the descriptive text immediately following the NPC's portrait does not automatically wrap in Chinese, but it does in English. I have also attached my own translation file and the original English text. You can see that in the original English file, the text enclosed in double quotes in the "value" column wraps correctly, but this causes the problem when I create the Chinese translation.
As this screenshot illustrates, when I mimicked the structure of the original English text CSV file, enclosing the text in double quotes and attempting line breaks, the CSV file encountered problems. Commas in the same sentence were recognized as delimiters, and the text before and after the commas was assigned to different columns (indicated by different colors). However, I observed that commas in the original English text were not recognized as delimiters. Therefore, I avoided line breaks in the Chinese text during translation, which allowed the in-game text to be successfully translated into Chinese. This resulted in some text failing to display with line breaks.
Hmmmm, curious. As for your first issue with the line-wrapping, I can see why that would cause problems. The mode for text-fields are currently set to "word (smart)", which does not appear to add a linebreak unless it meets a space, even if there is no spaces at all. There is no easy way to fix this quickly. I will look into making a solution for that in later versions, but that won't be anytime soon (as it is quite a bit of work).
As for your second problem, that one is quite strange. Lordling should support loading multiline string CSV just fine, and I don't see why Chinese characters would cause any issues (I wrote the file-reader myself, and while that definitely does not exclude it from being buggy, I don't see a reason why it should fail in this scenario). The other Chinese translations seem to load without issue (I just ran a test on those). Perhaps you can share your translation file on the Discord? If you do so, I can take a look what is making the loader fail.