IMO atmosphere is one of, if not the most important parts of a horror game. There's a lot of tiny elements that can help add to a game's atmosphere, but the two most important things are lighting and sound. Sound especially, a simple droning track can instantly make a place feel far more foreboding.
I recommend that you play through a horror game that you yourself find scary, and see how atmosphere is used. Think about what subtle things make it scarier while you play.
As for making monsters, I personally think that the best monsters make me say "what the hell is that thing." A monster that has an uncanny design, makes weird sounds, acts strangely, and just feels wrong or off is super effective to me.
The lack of a proper ending represents Mr. Krabs crippling ketamine addiction. You can only be in a state of ecstasy for so long before the high wears off. You can play through the game again and again, but you'll never reach that true satisfaction.
I'm not even done with the game yet and I'm seriously impressed with how much love and effort was put into what could be regarded as a shitpost on the surface. Seriously, this little game is great. Such an interesting idea. Good job!
