I'm probably in the minority, but I've never been a huge fan of drastic branching, or at least the way I'm used to it being done. My main problem is that characters and major scenes seem to drop off the face of the earth if you aren't on the correct branch. I want relevant characters to remain relevant regardless of whether they are the focus. Based on previous posts, though, I get the feeling that won't be much of a problem with this game.
A secondary, somewhat pettier problem I have with it is that I hate missing content or being forced to replay a game just because a small number of scenes were locked to a different path. Even in this demo, I edited the script so I could simultaneously follow all decision paths, especially when the only difference was the POV character of a scene. This is one of my personal mind goblins, though, so I understand that many people feel differently.
Everything I've said here aside, I'm really interested to see how your branching turns out. I like the idea of paths being a little fuzzy, with the ability to drop in and out of plotlines and character dynamics depending on your choices.
Regarding the inside vs outside choice, I think that in most eroge it serves no purpose besides catering to different fetishes. Either the NPC has no opinion on the matter (which makes them feel a little flatter as a character) or the choice is basically to do what they want and gain points or do the opposite and lose points. It's hard to add nuance to a decision like that, and if you can't I don't see any reason to have it.