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I was really impressed by the granularity and level of detail in the demo sprites. It looked like you could independently change different facial features. Is that a custom system you made, or are most devs just not using Renpy's full feature set?

The latter.  Complex Relations uses layered images for the sprites, which makes it possible to compose sprites out of a collection of options for each feature and not have millions of full sprite images in the database. That's part of Ren'Py's basic feature set, but it's enough legwork to set up that it's no wonder that a lot of devs don't bother to use it.