I started colouring the key nouns in room descriptions. I've never done this before, so it felt rather strange and disruptive to the flow of the text.

Then I thought I'd better colour those same words whenever they appeared (except in the list of objects and inventory). This felt even weirder. For example, if you examine an object and refer to it again in the response, do you colour it in the response?

Then I did a search and replace to find all instances of words that should be coloured. Again, I couldn't find any consistent pattern and it felt more and more uncomfortable. The adventure was starting to look like Joseph's technicolour dream coat. In a word - amateurish.

Then I noticed that the Adventuron hyperlinks to words are automatic. It has nothing to do with your colouring, so I had coloured words that were linked, uncoloured words that were linked, coloured words that were not linked and uncoloured words that were not linked. Huh? This is very confusing for a user. As an example, I have a door whose description says "...it's carved out of solid rock". Rock is normal text, but it's hyperlinked because I have a separate rock object.

In the end, I decided to remove the colouring.

So what does everyone else think about colouring of words? If you do it, what rules do you use to determine whether or not to colour a word?

Colouring needs to be different in the response text, and I'm part way through implementing this simply using the <my word> tag, which will have context sensitive colouring based on if it's response text (in the on command block), story text (location text or on description text), or incidental text (the on tick block). Essentially you push the colouring to the theme directly and only have one colour per category and one to four highlight colours per category (usually just one).

Hyperlinks introduce another issue as they are an orthogonal concern that are typically demarcated by a different style. My feeling is that hyperlinks are a lower concern than the story driven colour use. Games should be playable without hyperlinks, so therefore colours should belong to text delivery more than hyperlinks. Clickable words at the moment tend to involve nouns, or directions.

The simplest way of course is to remove all colour, which is what you've done, but I think you are throwing the baby away with the bathwater.  I think Adventuron will work well when authors keep it simple and just use <some text> without explicit colours. Bold or italic or underlined text for links might be something that can work alongside colouring.

Making a general system like this is hard because you need to make choices about the way that authors want every aspect of the system to work. I think I am mostly covering that with my themed approach. 

The default hyperlinking is based on known nouns, but not present objects. That's where the inconsistency in the hyperlinks comes in. But there is also a problem with assuming that a non present object's noun is not needed for hyperlinking. It's possible perhaps to have a conversation with someone in the game, and they reference a new topic noun. That noun is now known. Maybe the player might like to click that noun to ask the character about it? Even though the noun does not relate to a present object.

Large chunks of this area already configurable, and more will become configurable, but reasonable defaults must be used, and I'll do my best with it

In the interim, keep it monochrome if you like.