Hey, thanks for the kind words and the in-depth feedback! Both are very much appreciated :)
I agree that more realistic cloth physics would definitely improve on the game's visuals, but unfortunately the software I'm using (KK) doesn't have a physics engine and doesn't allow for manipulation of clothing - just basic character modelling and posing. I wanted to go with something super-simple for my first attempt at a game. Next game will be more ambitious, though, and hopefully I'll be able to address all your concerns :)
No spoilers on future plans, but the answer to 90% of the questions in your last paragraph is... yes ;) I hope you enjoy everything I have planned for the future of CK!