I liked the fact that it wasn't immediately obvious which words were clickable (and therefore it didn't feel as if all the puzzle pieces were being handed to me directly), but I did get a little stuck on the "something you're overlooking" section and ended up having to brute-force it. Personally, I think you might be able to get around that by framing the question a little differently rather than altering the visibility of the words. I feel that if you did make the words too visible, it might lock you out of writing a puzzle where the player really has to think laterally about which word(s) they want to pick up - but that might not be necessary, depending where you plan to take the story. As you say, it's a delicate balance.
Overall, I agree with the other commenters that this works well as a proof of concept. I'd be keen to revisit this game when you've had a chance to work on it some more!