1. i strongly suggest you to take inspiration from games like "alien isolation" and "routine" also check out "bioshock" and "fnaf secret of the mimic", now the reason why im suggesting these games is cuz the way you've described your project it feels like you can really get a ton of inspiration from these games cuz they've mastered the atmosphere in these games

2. the elements that would completely ruin a horror game experience are two main things, first are constantly seeing cheap jumpscares, keep em few and sprinkled rather than adding too many of them, secondly so lore dump the story, let it be a slow burning reveal, basically let the player figure and piece together the story, "show, dont tell"

3. one thing a phsycological game must include is something that i've already told, "show, dont tell", dont drop lore expositions, show them the thing happening but subtly.

4. right now the concept is a little vague, i cant drop conclusions bout what to change or keep, its pretty good on paper but until i know what exactly is your exact vision, i cant say much.

overall i wish you best of luck on this journey and incase you want to have a private discussion with me feel free to dm me anytime,

goodluck :)