An interesting premise and some of the loading screen tips hint at interesting future plans (the one mentioning 'powerful orgams' and becoming helpless perked my interest, but the masturbation minigame doesn't actually seem to have an ending animation) but there isn't isn't enough there at the moment to say yay or nay.
Still, you have my attention.
I hope you take inspiration from stuff like
Exhibition Academy and other H.H Works games, insomuch as instead of just having binary clothes on/clothes off options, you allow buttons to flash people. To open her shirt or lift her skirt. Allow her to wear toys under her clothes or clothes without panties and still gain her exposure buff.
A crouch/crawl option would be nice too, to duck behind the low walls scattered around the town.
The biggest problem I have with it is that, since her arousal rises when she can see people but they can't see her, it ends up in practice being less of a streaking game and more of a stalking game, where you follow the dumb NPCs around unseen, like you're playing a hitman game.
Proximity to people is fine as a trigger (though you might want to add an indicator that denotes that she can 'see' someone, so we know the correct range/how much line-of-sight is required. Like a heartbeat/Doki-Doki meter to show her getting excited?) but it feels like there should be a gain from allowing herself to be seen, but a risk too.
When she's seen, make her arousal shoot up but her HP plummet, so you have to run and hide quickly after she loses her nerve.
This would tie into the 'flashing' I mentioned before.
Temporary nudity for quick arousal boosts without the risk of actually running around naked, and consequintly less points as a reward.
Also, tweak the AI so that they don't forget about you the moment they lose LOS.
If they'll follow her around after seeing her naked, make them follow her around corners for a bit too, so the player has to actually take multiple turns or duck behind something, using her superior speed and knowledge of the map layout to escape.
... That might make it too hard. maybe just a couple of specfic NPCs follow you so aggressively?
On the opposite side, I also like that she can walk around mostly freely in the towel and NPCs only notice if they get really close.
Presumably because it's dark and you can't tell that it's a towel unless you're close?
Either way, it opens the possibility of other clothing items that appear decent at a distance. Maybe something kinky like crotchless spats or bodypaint clothes?
Something that doesn't attract attention from a distance, but still causes the girl's arousal to rise as fast as if she were naked, because
she's aware that she's wearing a dressing gown with nothing under it, or a short skirt and no panties, or a see-through raincoat and nothing else, even if nobody else notices.
Edit: Interactable objects throughout town would add a bit more life to the area too. Walls she can lean on, benches to sit on. Maybe turn some of those narrow passages between buildings into a shimmy-space?
Maybe a park with a swingset or slide?
Innocuous 'normal' actions that she can take that become more exciting because she's streaking.