Haha, nice to see a game that doesn't get silent-abandoned after months of no news! You're right on the money with that 1 hour playtime estimate, my last save is at 1:03:xx, right in front of the doors to the demon queen's chambers.
I'd suggest two things:
a) Some kind of a map
Iirc, Amareth said something along the lines of "I know the forest, and there's nothing of interest in that direction" when I wanted to go to the West somewhere at the beginning. For world building purposes, a map may not be the most normal thing lying around because of the cost of making a map, but maybe you could give Amareth the ability to "conjure a map" in front of her, basically an image of the current world map where you can only see a small ring around her clearly. Depending on how much "resolution" she wants, you could make conjuring the map cost more MP or something like that.
b) More "reactions"
What probably confused most people who played the demo is that in the beginning, before you go to the village, you can't go to that place with the river. Iirc Amareth again said something like "I can't go there" or whatever. Combine that with the "I can't go North until I have sorted out everything in the village" or so message you get when you try to go North in the village and the player has no damn idea what to do, because they try to talk to everyone in the village but that doesn't accomplish anything.
What would have helped here, is that you give the player the ability to go to the river and rest, but if the player tries to go to the East and to that temple, you stop them and have Amareth say something like "I should really go to the village first" and turn back. Same thing with that path to the North in the village, a message of "I can't go North until I have sorted everything out in the village" makes sense if you haven't talked to the creepy old man yet, but when the only thing you can do is go to the temple, a message of "I should check out that temple to the Northwest of the village first" would have cleared things up considerably.