honestly I got the bad ending my first time and yeah there's really no difference between good end/bad end outside the cutscenes you get. shit man I did literally every positive karma choice and still got the bad end (didn't know what to do with that white potion) so you certainly can
as for why letting the thief go is good... she runs the orphanage, where do you think the money's going? hell you can even stop by after and spend extra cash for more sex with her, and the more you pour in even has visible improvements to the orphanage, which is more than I can say for the prostitute and the nun unfortunately