Thanks for playing, and double thanks for the feedback and ideas!
I also felt that the defensive options were somewhat over-tuned, but I figured that for a game-jam situation it's probably better to aim for "too completable" than "intractably difficult." In retrospect, I think the "physical attacks can be blocked, magic attacks cannot" (a design idea picked while developing at high speed) contributes to the underlying problem. It's not a totally bad system, but during design, I had the feeling that the player character was pretty fragile, especially if players had bad luck or misunderstood the value of their healing units.
The counterplay it allows is just pretty narrow, I guess. It's probably not too bad when we don't have tons of mechanics to begin with: it could have a fun, delayed impact on decision making if you're trying to stay topped-off and it was an easy lever to turn up to make bad guys scary. In a bigger game I think it'd be more appropriate as a smaller, special corner of the design.
If we do go for more word-making fun I'd love to pick your brain for layout ideas. In my head I was imagining that we'd have little scrabble slates or boggle-esque trays of letters, but I can see what you're saying about the distance being non-ideal.