I was thinking that maybe the clouds were supposed to emulate the silhouettes of more tentacles at the front of the scene. Which makes me think that it might be interesting to have a few tentacles snake out from the scene into the black at the edge, like peeking around the corner, to make it a little more immersive and not just have that hard dark border.
Regarding the difficulty, it will probably be necessary at some point to balance it against any actual goals there might be. Will there be anything specific to achieve? Will it be possible to win the game? If there is going to be a definitive end point, it should probably take the average player about 4 or 5 hours to get there, and it should be necessary to play somewhat carefully or “defensively” to keep your report level in check, which as I said, I didn’t find to be the case so far.
Different body shapes would probably complicate some things quite a bit, yes. Different breast sizes already sounds great; I’d love to see that. And I was going to suggest different skin colors, but I assumed it was out of the question because it might interfere with the “hentai” aesthetic of the graphics. Nice to see you’re considering it.