I love blacksmithing. I would love to see this game expanded into a full game with different metals and alloys, laminating, annealing, etc. The one thing I will say is that the use of one button doesn't add anything to the game and doesn't seem to be critical to the design or concept of the game (you could remove it from the design or the concept and the game would be unchanged).
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That was definitely a consideration with the button. It ended up being a nice bit of themeing, where the real 1 is supposed to be that you're doing one thing over and over until you get it right, but we didn't want it to be trial and error. It's supposed to be something you are completely able to get right the first time, but you just probably won't be good enough. Personally, it comes from my background of practicing combos and situations in fighting games over and over.
As to more stuff, we really wanted more, but it just ended up being out of scope for the weekend. I had a whole thing built up to use with the Marching Cubes algorithm to deform the model with hammer hits, we did a bunch of research on how tempering and quenching work, and the Marching Cubes bit was supposed to also hook in with enchanting it with mana and trying to handle the behavoir that comes with that, but we just didn't have the time.