Fan works of all kinds are in a legal gray area, as discussed in many places online. Fan work is not the same as using copyrighted material. If unsure, please try to find a primer on these issues. Not sure where you can get one, sorry.
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That depends on the definition of "content". Both copyright and author's rights law protect the specific expression of an idea: if you draw Superman yourself, from scratch, without e.g. tracing original art owned by DC Comics, then no, it's not so clear at all. It depends on the owner, jurisdiction, and whether you're making money with it, but you won't automatically get in trouble.
It is not a gray line, what happens is that many companies tolerate it, but if they wanted to, they can remove your fan-game and legally they have the right and there is nothing you can do to defend your work.
If it really was a gray line, you could go to court and expect to win and that doesn't happen.
Companies like "Harmony Gold" every time a fan project becomes notorious, they knock it down.
Companies like Capcom have unofficially said that they have no problem with fan-created content, as long as it is respectful.
Companies like Sega have closed projects, etc.
In the case of itch. The rules say that you must have the rights or permissions to all content you upload, but this is not enforced.
You can upload a fan game, but if the owner of the content files a DCMA, Itch will remove the game, don't hesitate.
Maybe you are confusing "fair play", where it is legal to use content that you do not own or do not have authorization for, but a fan-game does not fall into that definition.
Edit::
Examples:
https://www.wired.com/story/sega-shuts-down-streets-of-rage-remake/
https://www.gameinformer.com/b/news/archive/2010/03/02/fan-made-king-s-quest-seq..
The thing is that not only the sprites or music are protected, but also the names and characters, for example, Superman.
If you draw Superman from scratch and place that drawing in your game, it is still Superman, which is copyrighted content, it doesn't matter if you drew it from scratch. Drawing it from 0, by you, does not give you the legal right to sell or distribute said content.
As @Eris Lord Freedom says, it would have to be a "Transformative" work, for example, a superhero who flies, but who is not called Superman and who is not so similar.
When you make a fan game, it usually refers to names and content that is the property of a company, even if you create the sprites or music.
You can create a VN about a mustachioed plumber and a princess in a fictional world inhabited by turtles and you'll legally be safe.
But can it be considered a fan.game?
The moment you make a VN of Mario and Peach, what would be a fan-game. You also have a copyright problem, because that Mario and that princess are protected content.
As you say, there are certain lines that are not clear and could only be resolved in court. But in this case we are talking about Itch. If you make a VN with Mario and Peach and Nintendo comes with a DMCA to Itch.
What do you think will happen?
It is based on that that I always consider and recommend considering that any fan-game can be removed from Itch if the rights holder wants.
PD:
For example this case of harmony gold against argentine developments (sorry, only found in spanish)
https://www.guioteca.com/anime/harmony-gold-censura-produccion-de-fanaticos-arge...
This person had created some videos that told a fan-fiction story of an anime called "Robotech" all the content created from 0 and still had to delete everything.
He could have changed the name and designs, in such a way as not to use protected content, the problem is that by doing that, the product cannot be directly related to "Robotech" and therefore it would have ceased to be a fan-fiction of "Rototech".
Copyright 'law' is just a tool for rich people to maintain control over their cash-cow product. If the rich person doesn't COMPLAIN... poor people can do whatever they want. If the rich do complain, the poor lose. period. Know what the rich will tolerate, from previous examples, and don't cross the line.
Copyright law is also how poor people avoid being exploited by mega-corporations.
It's not easy for an individual artist or self-published writer to sue Disney - but copyright law is what prevents Disney, Paramount, Warner Bros. etc. from just mass-grabbing stories and art and turning them into movies for their own profit. The fact that the law exists keeps them from grabbing everything they can.
There are occasional cases of "we're pretty sure this was grabbed from someone else's idea," but Sega couldn't grab Flappy Bird and distribute it through their channels because of copyright.
Copyright law has problems and needs a major overhaul but it is better than no protection at all.
I like your reply because it is true... but in all fairness, the creators of 'flappy-bird' (or any successful game) aren't poor anymore... so technically, copyright law is protecting the rich... because they are now rich. In reality, the VAST majority of TALENTED working artists are "poor" relatively-speaking, and (from one point of view) are being "exploited" by the rich... It's just called "employment", where the poor do all the work, and the rich take all the profits and own everything the poor create. Yes, that's just how the world works... but, it still ends with: Copyright 'law' is just a tool for rich people to maintain control over their cash-cow product. (99.99% of the time)