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So, in order to do damage, you first have to reach the appropriate number of successes to hit the target. So, in that case, if Mr. Rabbit has a DEF of 1, you need at least 1 success, and any additional successes after that equate to damage (for example, if DEF is 1, Successes equal 2, then the base damage is 1) plus the damage from the weapon, which is 2, totalling 2 damage total. If your successes do not meet or beat the DEF of a target, the attack is considered a miss. 

Looking at it another way;

Damage = (Successes - Target DEF) + Weapon Damage

or as per the example above

(1 Success - 1 DEF) + 2 = 2 Damage
or (2 Success - 1 DEF) + 2 = 3 Damage

Hopefully that makes sense.

As for the suggestion, it's something to consider. I wanted something that would convince others not to just max one stat, and while they could do that, there would be a downside to it. Options with pros and cons, in other words. But it's something I might change in the future if it's too much of a downside.

Post your opinions, suggestions, (constructive) criticisms, and more here!

You can also ask any questions about the system here as well.

The couple are Alices; that much I can go ahead and confirm. There will likely be some expansion on that later at some point, but I will at least confirm that much at this time. As for the Voyeristic Vulpine, I can't say right now, as she will have some story quests and modules she'll be featured in later down the road I have planned that'll answer these questions and then some. It's a possibility, I'll say that, but at this time I can neither confirm nor deny.