I really love this idea. It's a fun, simple loop that manages to keep itself engaging.
It does feel a bit like the difficulty ramp is too harsh, and I think that's because there is almost no way to augment your health. This makes the second area boss seem impossible (I still havent beaten it). Maybe adding armor as drops to increase your health could help balance this out?
It also took me way too long to realize you could rotate items, which adds another dimension to it.
Incredible job!