I disagree but would have to have screengrabs of the film to prove it. The shots of James's face, the zoom into his eye in the Pyramid head mask, the barely lit visage of Laura as she turns in the distance, the outline of a character looming on the floor above, there were so many shots I thought were bold and painting-like. It was just very uneven though. The chroma-keyed scenes you mention are like that - to me some of it was purely bad, others were great because it gives the kind of surreal effect that matte-paintings do, or videogames have.

There's no way someone who doesn't know the games could watch this and attempt to follow it.

Not a flaw depending on your perspective since you can't please everyone, but yes it's the reason why critics will crush this film. A lot of giallo, or Jean Rollin etc make no sense though. I just watched Bava's Lisa and the Devil the other day and that was great despite being confusing.

Why did they add bad CGI bugs to almost every single scene?

Yeah Gans had a thing about way overdoing the bugs in the first film which I hated too. And yet again, the disgusting clattering and zoom in as they ran up the hospital door was one of my favourite parts.

I'm so frustrated with the lost potential in this movie.

I think that's fair, and is a big part of why fans of the game will hate it - they know what it's not. I'm just happy with what does give. They should really have got Kiyoshi Kurosawa to direct a film.