Hello Neco! Thank you for giving it a try. 😸
For the Red Fairy, counter her is a bit tricky, yes. You'll definitely have to "keep an insisting eye on her".
For the Shift-Left/Shift-Up, we never had this problem reported before. This is odd, we'll investigate, thank you.
For the fact you can't speak, like hinted in the tutorial, candles can have a soothing effect. The trick is to look at them with your cursor long enough when you are safe! Then you'll be able to interact again with your surroundings when you have a clear mind. She cannot interact while there is a danger in the room, even if not visible (that can help you to be aware of it) so be very careful of sound cues when they appear.
And last but not least, the progress is indeed tied to how much lore you discover during one night. Certain pages of the story are tied to voicelines, that you have to find. Some are easy, some are more tricky, like treasure hunts. There's an optimal and ideal "path", up to you to find it! Not all voicelines unlock pages, but some reveal very interesting informations nonetheless, if you're into the story and theories. The difficulty is to juggle between this research, and countering the threats.
Anyway, thank you again for your video, feedback and kind words! Hope our answer helps.