It was intentional to not reset the level when dying - for the cases where you placed the boxes properly, but just messed up the platforming. You can press R to reset the level - perhaps I should have made that more clear in the button prompts.
You're 100% correct about the key mechanic - I realized that it was nearly useless late into development, but it felt too close to deadline to remove it. As far as the cheat goes - well done! I completely spaced that, perhaps a bit more playtesting could have solved that.
Thanks for the super insightful feedback!