Agreed. I think the key issue with extrinsic motivators in lifesim h-games like these is unlike regular games they shouldn't be a way of merely increasing difficulty for the player, because h-games are primarily played for the intrinsic motivation of wanting to see the h-content. The goal should be to develop alternative paths based around not meeting those extrinsic motivators and then tuning that sytsem to make that content accessible by the player if they want to experience certain types of storylines. With Newlife, the current extrinsic motivators are only a good addition because failing them offers specific storylines you can experience as opposed to them being a bad end state.
This an excellent point you brought up. The idea of segmenting events, with each having several variants of what is ultimately the same narrative "branch" is actually a really solid concept that does let the dev avoid having to juggling tons of divergent endings. I actually remember seeing a talk by some visual novel developers for mobile games (primarily romance VNs aimed at women). The devs highlighted that they received more positive feedback when they focused on giving the same routes multiple variations by acknowledging small choices that the player made, than when they focused on branching the plot out through major decision trees. I think they even mentioned that players found it more replayable, which seems counterintuitive since you'd think that people replay to experience different story branches.
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Your point about TiTS customization not really improving the game is something I definitely agree with. Most of the customization options don't really matter. They only make the game feel limited when you experience the plot and characters since nowadays the devs of TiTS and CoC 2 are obsessed with their OCs being a certain way. CoC 1 on the other hand had much fewer customization options for the player character, but those customizations were woven into the game and story itself giving them much more meaning. Plus there's fact that many side characters could be experienced in multiple different ways.
It all just makes the lack of development in Newlife a real shame. Maybe we couldn't have gotten more cross-event interactions due to the complexity, but we could have gotten more small variations in existing events and more minor events in general. Surely that wouldn't be too hard to implement since it would just come down to being able to write those events and variations in the first place.