Thank you so much for playing my game and giving me detailed feedback! I agree that combat is mindless and easy. The challenge comes more from trying to beat the level in little enough time to get an S. In later levels I even piled up spikes just so that it wasn't too easy. Unfortunately, you weren't able to play very far though. The fact that you couldn't progress was indeed a bug. I think your second theory is the most likely cause of it. But during development level 3 was the only level that'd do this and it'd happen 100% of the time until I made a workaround. I thought that I had fixed the issue after I had implemented the workaround because I was able to proceed without any more issues during testing from then on. Mysterious bugs kept popping up during development and a couple were turned into "features". The fact that not every worm enemy spawns is one of these "features". By the time the jam was coming to a close I was burnt out on the project.
Doing this game jam and watching/reading your feedback has definitely taught me some things and hopefully, my games are better designed in the future.