Based on super feedback from some good folks at the Portland Indie Game Squad as well as a friend working down at Blizzard I have refined a few elements of the game play. Thanks everyone for the detailed thoughts, always greatly appreciated!
Strafe!The most noticeable new change is the ability for the wizard to "strafe" while moving in a specific direction. For example if you are holding down the "right" key and then push the "up" or "down" key you will move diagonally as directed while still facing your original direction. This should hopefully make the movement seem a little more fluid and reduce some WASD fatigue for those using the keyboard. This works while dragging around objects as well, which brings us to the second update!
Action!The action formerly known as "Grab" has been superseded by the more generic "Action" command. The "Action" command is used to interact with NPCs and some objects (switches, beds, the floppy of saving, etc) as well as to attempt to grab things to move. This should allow players to interact with NPCs and objects only when you desire, rather than simply when you bump into them. As part of this change I updated the tutorial to cover the added feature and updated the cabin a little.
Talk!The final changes were to the dialog system. First up was to add the ability to immediately exit a dialog with the standard "UI Exit" key or button, which can cut things short if you didn't really mean to start talking again (though this should hopefully happen a lot less now that you have to press the "Action" key to start the dialog in the first place). Second I added a method for highlighting key words and phrases in the dialog to call out important bits and help those who don't like to read lots of expository text get the gist of the conversation and get going.
Just for fun I colored in a sketch I did the other day while hanging out with my kids. Here is a bit of concept art for the forthcoming enemy "Witchdoctor"!
Alright, that's all I've got for today. If you have any other great ideas please let me know!