The whole game is a major undertaking. There's an obvious benefit to having the character customizable like this, and so we've decided it's worth it to do it, and people are quite pleased with it. The reality is that it's already immersion breaking not to have certain aspects of your character (for instance, the chastity cage) not reflected in the CG art, so we're going to have to have an engine in place for those things to be reflected anyway. And I reject the premise that having the character customization only reflected in certain places is pointless: it's actually ubiquitous in video games for that to be the case, where a character's armor, weaponry, race, or other customization might be reflected in some interface or other but not in-game cutscenes, or portraits, or other interfaces, etc. The more of that that's consistent, the better, of course, but it's not abnormal, and certainly not pointless, to have character customization that isn't universally applied, any more than it is to have mirrors that only reflect the player character, or only reflect the static elements of a scene.
As for the game side of things: right now I'm coding for more dynamic animation variation when it comes to things like expressions and gestures, new fonts and Cyrillic character support, new chastity cage and other cock adornments, and on the writing side I'm working on new prostitution scenes for Hiro, more Ogre scenes, alternate dialogue for various states of feminization, and when that's all done the next part of story mode. Explorable dungeons will come, but it'll have to wait. Story mode will be getting the brunt of the focus once everything that precedes it in either priority or dependency is done.