Some slow progress has been made! Additions since the last post:
There's an okay message display system: I simplified it to just display at the bottom of the screen rather than relative to where you are on the map. Not quite as nice, but it works.
A simple inventory: This made me think about how the controls are going to work. Here's the plan: button O for changing inventory items, button X for talking to NPCs, looking at item, picking up item or generally interacting with things/the world.
NPCs with dialogue: I wrote out a load of dialogue for the NPCs, each person has three things they say. I'll probably need to add context-sensitive chats too, like 'oh, you found my item, thanks' kind of stuff.
A rain particle system that took far too long to make. It's increased the moodiness (kind of important for a horror game, right?) but took absolutely ages and took far too much brain power to create. The end product is pretty simple but looks fine. Weather transitions--e.g. going from rainy to clear--look really cool.
There's lots of sprites designed which aren't in use yet. There's also a barebones full map. Currently using half the standard Pico-8 map size, hoping to use the rest of the space to make many more sprites and map tiles. I think a smaller, more detailed map would be a better than a larger more repetitive one.
I still need to put some game in the game. Or more particles, that will also work, right?