Story is progressing slowly, but surely. Previous main update added two story cutscenes and I want to finish the first story dungeon before the end of november. That's just one path though. Your goal for act 1 is to meet Mr. White. Going with the generals is one way, focused on combat characters. Non-combat oriented characters will be able to get a job in one of the three settlements and get clues to his hideout that way.
Sprites for enemies are placeholders. Kobolds in this game are pretty much small humanoids with animal characteristics, so there will be lizard kobolds, rat kobolds, frog kobolds and so on. I will be redoing all of the sprites for all enemies at some point. Also, there is a reason why those kobolds in the cave are insane.
Same goes for the weapons. Some use duplicate sprites, but that is only temporary. Entire graphical side of the game can be considered to be placeholders.