That's a girl wearing very large winter clothes so you can play the game without getting distracted by her girly parts.
In the demo you're drilling just to get high level. In future versions you'll drill to unlock as many abilities/power-ups as you can before a boss come wreck your shit/to defeat all the enemies and progress to the next level/ to drill a very large structure that takes a long time to drill while fending off waves of enemies/etc. I'm still thinking of some fun level objectives.
The goal of this demo was mainly to get the important objects coded and some basic sound design in place.