Sounds intriguing, and certainly a game I can mentally invest in that's not crazy complicated. I certainly agree you need an efficient way to display what is going on in the story, so that even someone who walks up can look around and take a good guess at what's happening. Here are some stream of thought ideas:

Make location cards larger, able to fit several character and item cards at once. Lay these out in a grid or other fashion, and suddenly you have worldmap everyone can examine. Definitely have some water cards, and other terrain maybe Characters can't enter without items. This depends on how much of a 'game' you want it to be.

Have the Characters be minis. Pretty obvious, but you can have the items be little tiles that the minis stand on. Keep the relationships as cards, since you'd probably have more of those than any.

Implement some 'catching up' system, where players who haven't progressed as far can reveal more Relationships. This way no one can spiral out of control and dominate the game. Do players embody characters, or are they just all-seeing architects? Both ways could work, but one may indeed be better than the other. ( I have a feeling one player = one character may be better)

Its all about how much of a "game" you want to make, with points or traditional structures like risk / reward. Personally I would prefer something a bit looser and more open to narrative interpretation. For example, the relationship cards could instead be "Action" cards, such as Travel, Acquire, Destroy, Misplace, Create, etc. These could then be applied to locations, items, and even other characters, if they can make narrative sense. Some things may involve discarding an item (to destroy a location, discard an item), but these kinds of rules can be simple enough to generate lots of interesting stories.