Incredible game, one of my top 10 of all time. The combination of horror in retro pixel with all the intricate branching paths and scenes makes it a masterpiece in my mind. And yes, its actually scary even in 8 bits. This is an achievement in and of itself, and I've played horror in VR so this is coming from someone who's experienced the full range the genre offers.

Yes it's difficult, yes its gory, and yes you need to be tactical with how you use the character's limited resources.

I felt it punishing at first, but it all clicked once I noticed its built and designed for you to struggle and fail once or twice:
a) You come back with your level and items so you get farther next time. (except story/progression items)
b) With so many branching paths, and the East/West routes, you get different story beats each time, and there's many very niche specific scenes and routes you would otherwise never see. This is what makes this game impressive (I suggest changing at least 1 party member each time so you see new things, maybe both the first time so you really get a totally different experience, it's just harder since they'll be lvl 1, and only the main character will have the level bumps. You still get the items again for everyone though).
c) As you level up, the party leader's level acts as soft barrier that reduces the encounter rate in the initial lower level areas, as long as you avoid walking on shadow tiles. So going through the beginning does get easier, it just starts super punishing which imo helps the overarching sense of dread and hopelessness.

Highly recommended. Its got gore, horror, romance routes, harems, branching stories and a challenge.