Note that this feedback is based on the build(s) available at the end of the jam.
This one is a difficult game to give feedback on! Since the game content primarily comes from third party songs, we need to focus more on implementation than I usually would with a jam game.
The readability of red and blue beat colouring feels clear, and though the character animations aren't behaving, there's a certain charm to the mangled stilt-legged D -Man with his eyes off in the distance that's endearing as he hops from shipping container to shipping container.
I don't have enough familiarity with these sorts of games to have much perspective on where the sweet spot of balance between challenging and unforgiving is, so it's difficult for me to offer feedback on that as well.
As with other commentors, I had a lot of trouble getting this one running on Fedora. The game doesn't seem to find a device regardless of which backend is selected. It seems to run happily in Ubuntu, though.
You mentioned wanting to make the background more responsive to your actions/performance, and wanting to have discrete modes that players need to switch between to progress. Both of these sound like good directions to take the game in. Calibration options to compensate for input delay seem to be a common feature for rhythm based games and might be worth considering as well.
Thanks for submitting and best of luck with the project if you continue with it! :D