Where to start...
Sad to say that I'm actually kind of disappointed with this game as it presently stands. I was really excited with the ideas as presented in the OP, but the game itself really doesn't execute on them very well.
First off, I do have some positives! The overworld is, for the most part, beautiful. I love the amount of detail that went in to a lot of these early maps. Likewise, the music is gorgeous, some of the best tracks I've heard in a fangame. Everything looks and sounds great.
Unfortunately, they don't play great. As already stated, this game lags terribly. The PC hovers in a weird zone between sluggish and floaty, depending on if you're walking or running. And it's not just character movement that's effected. Transitions, like say between the Overworld and a Pokemon battle, are also slowed down. In-battle, a mix of input lag and the game taking a noticeable amount of time to process each move tacks on extra time. Getting from point A to point B is an exercise in frustration, especially once you get to the swamp that is Route 3 and the tall grass slows your movement even further.
Secondly, this is probably more of a personal thing, but there is not a single character in this game that I have a positive impression on - except the Rival, but we'll get to him. The PC's father is some nebulous concept I have yet to actually encounter. Their mother, on the other hand, slowly monologues about her woes seemingly every chance you give her, and have I mentioned that text boxes in this game are also slowed down due to the lag?
The fact that the regional professor is a local hero wouldn't be so strange in of itself, but it is when the reason everyone points to as to why they like here is some variation on "she went to a famous school and did well there." Seriously, aside from her lazy aide, this seems to be the one thing everyone who talks about her brings up. Surely she has done something, ANYTHING else?
The game also has story problems, and they relate to the choice system and the tutorial you've chosen to use to explain it. Quite simply, the player has no reason to care about the Swindler or the Townspeople he fooled. He's already being found out the first time you entered the town, so you've had no chance to get to know any of these people to feel offended on their behalf.
I'll be honest, I let him go. I didn't really care either way if he was turned in or not, but the kicker of the whole thing was that the choice system that has been hyped up? Turned out to be a "Do you do the morally right good thing, or do you do the self-serving evil thing." I can't fault you too hard for this, just about every game that has a choice system like this basically uses it as a karma meter anyway, but that doesn't make it any less disappointing. And there's just something blase about using a conflict the player has no stake in and no reason to care about as your big CHOICES HAVE CONSEQUENCES tutorial.
I'm glad I'm not the only person who's noticed that Pokemon BSTs seem... Off, somehow. Pokemon the player owns are slower and weaker than other trainer's Pokemon. When I'm getting hit for half my HP on a neutrally effective move while my Super Effective move can barely do an 1/8th of a life bar per hit, something's going on under the hood. Especially when I catch a Pokemon who was doing stuff like this to me and then in my hands it becomes just as trash as the rest of my Pokemon.
This is the big problem with the Rival, in fact. His Rufflet hit for anything from 1/2 to 4/5 of any given Pokemon's HP depending on if he was using Tackle or Fury Attack. Also, a Stealth Rock/Dragon Tail Larvatar and T-shock Helioptile are just mean for an early game where basically the only thing you've thrown at us are early birds, Riolu, and Sentret. I can forgive it just this once for him, though, because I actually do like his character.
(I also have a feeling that the game's catch rates were tampered with, but I have no evidence of this aside from my own rotten luck.)
Despite the fact that I downloaded this game on release day, I'm still only on Route 3 because I get too frustrated to continue, I can only play for little bits at a time. The reason I'm posting now is because at this point I'm not sure if I'm coming back to it again, the entire dead factory questline has been nonsense so far, from the way the PC is treated for an event that they're railroaded into (Rude! You overheard our conversation. Guess what? Now it's YOUR responsibility to go fetch this lady.) Then you actually go there, and as you're trying to slog though a factory that's apparently haunted with Koffing rather than Ghost Types (That you can barely do any damage to and will almost without fail punish you for Switching by using Poison Gas) you then run into a trainer whose classmate has just disappeared but he decides to fight you anyway because "he's bored." Really? Five seconds ago you were freaking out because "Sarah's gone!"
This wasn't what did me in though. What did me in was getting my entire team 3HKO by a Murkrow using Pursuit while I wasted over a dozen Pokeballs to capture it at red HP. Maybe that's childish on my part, but I can't think of a better way to encapsulate everything wrong with this demo then the fact that you are:
1. In a Haunted Factory with no Ghosts.
2. Faced against a cheating computer with all the odds in its favor.
3. On a route where all this game's gameplay problems are in stark relief.
4. Because you were railroaded into an encounter you didn't want any part of.
I don't begrudge anyone who enjoys this game, in fact I'm sad that I haven't been able to enjoy them the way other people have. I also have nothing against the devs who have put a lot of work into this game even in this early alpha state. I just feel like you deserve an explanation for why this game didn't work for me, so hopefully in the future you can continue to make great games.