Sorry if you took my comment the wrong way, though it sounded mostly negative, there was a lot of good things in the game, I just find it easier to tell people about feedback than other stuff,
I'm not sure how the hit indicators weren't more obvious to us, though my friend who played the game shared my original thoughts on this, though we might just both be stupid.
Wanting to keep the game first person makes sense. I think our main issue was not clearly being able to see if we were a spot that would be attacked without looking down the whole time. This point may be a skill issue, but also seems like something that could be implemented somehow. Not sure exactly how.
Edit: See Risk of Rain 2 for third person aiming, it does work.
Didn't say you can't call it a sword, but it seems like other people have also been confused about it being called a sword. You also see the projectile in Terraria due to the 2Dness of the game, whereas in this it looked more like melee particles to me. If there was somewhere stating it shot a projectile, calling it a sword would be fine. Name ideas I thought of while typing this are: Projectile sword, short ranged attack, something gun. They're not great names, but I also only spent about 15 seconds thinking of them.