Very interesting take on the theme! As a physicist that has worked on the dynamics of complex systems (like how properties/ideas spread), I love this concept.
I think a couple of more varied interaction types would help the game.
A really cool feature would also be to track the happiness “state” of each NPC in the game (whether you interact with them or not) during a level, then display a fast-forwarded “replay” of their state during the results screen with for example an animation of bunch of circles on a 2D grid that represent the people, and some property (like color) that shows their happiness state over the course of the level (kind of like in Katana Zero where the level gets replayed at the end of the level).
I think this will really show the impact that you are creating on others, for example if your actions cause a chain reaction of positivity/negativity in that replay.