So, when I set out to do this game, the original idea was that there should be more games like Karryn's Prison or Melty's Quest with less tedious combat. I definitely like games like Claire's Quest, LonaRPG (right, minus the scat stuff), the Magical Girl games I've seen - so there are some elements from that.
I think the next move for this game will be to create some kind of progression system. I'm not sure if I'll track more to the traditional RPG level up system or I'll have something more focused on the H-Events the game puts the MC through.
Right now development has been a bit difficult because I'm trying to create a progression system without making the combat longer or more tedious (I really get why Karryn's prison is the way it is after having to dev myself). After that the stealth system will get better because there will be more player choice to stealth past enemies or kill/fuck a few extra slimes and then have the power to brute force your way though. That's the essence of a good game - feeling like you have options.
So after reading your post and thinking about it for a while, I had some thoughts on possible progression...
Option A: You could try something different and have Lillia power up through sex. There are two problems with this though; Why would the player want to win? Also how could that be explained with in-world lore? Would Lillia be the only one capable of this (and why)? Or would there be others, etc.
Option B: A standard XP system. The advantage is that its been done hundreds of times, its built in, everyone knows it, and it just needs a bit of tweeking. The bad thing is that things can get horribly grindy if not balanced just right.
Option C: Same as above, but with an extra little addition. So you level up like normal, but what about when you lose? It might take some fiddling in the back end, but how about this: When you win you get XP as normal, but when you lose (and sex happens) you get half or a quarter XP. That way the player can still progress if they struggle with the game (or if they just like watching the scenes), they aren't really punished for being on a loosing streak or running out of healing items.
Another thing that people seem to like is an extra menu that tracks who/what took th mc's virginity, and how many times each sex act was performed... though this would require fiddling with plugging or scripts, both of which I know little about right now...
Anyway, apologies for the text wall, I hope this helps in some way...