Writing as I go along:
1) Holy shit the character portrait for the Hero is horrible! Apparently I'm albino emo who has sniffed way too much spice so that my eyes have turned completely blue. Not cool.
2) Luckily, my father has a really cool 'stache and my mom is a fox.
3) Ah, my rabid atheist heart warms to the portrayal of corrupted religious extremism. And it's all with Arab influences to boot!
4) The backgrounds and portraits are pretty nice, no complaints there. The battle-view - not so much but it's not too bad.
5) You definitely need to include WAIT command in battle. Also, maybe it's flash but the combat animations are quite slow - well, not really animations as the enemies just teleport but your guys move slowly and the beginning/ending takes annoyingly long. Good call with the keyboard shortcuts, they are always useful.
6) Griffin seems allrighty sort of fellow so far while Rahel is suitably bitchy. But if this game is as traditional, ie cliche, as it seems to be, I'm guess she'll fall for the Hero at some point? Please, don't make it so! Amman looks like the classic old guy while Set is the annoying dough-faced kid. Say I'm wrong and it's not that obvious!
7) Combat is far too simple. Why is there no diagonal movement? Why my telepathic attacks have only touching range? Why the bow-woman cannot target anything else but squares 2 and 3 in front of her? Why two members of my team cannot switch places if they have movement points left? Either you do the FF-thing where positioning doesn't matter or you do a grid-based one which is actually tactical but then you have to offer some options. It's good that you can change the order and initial formation of the party and that backstabbing does little more damage but that's not enough :/ Also, moving AFTER attacking, definitely needed.
- So WAIT, GUARD, SWITCH these would improve the combat a lot. Then, targeting by mouse, ie click on enemy and if its on range, the char would do its default action.
8) Apparently I'm doomed to play in a window, since that makes it run slightly better. Walking around is still painful
Stupid flash.
9) Little bug with the first side-quest, the married couple and the sister. When I try to inform her that I killed the husband, she jumps over any response and ends up asking me how I liked the reward, which she never game me. The quest doesn't get completed either, since when talking to her again, she keeps asking about the husband.
10) Nobody likes invisible walls. If you want to build a town for the player to explore, then it should be a real town so you could use fences or walls. Personally, I wouldn't mind if you forgot the exploring, since it's annoyingly slow thanks to Flash - market especially was killing me - and you yourself admitted that creating it takes a long time. How about if you scratch the exploration and use still images instead? You could have pictures, like in Betrayal at Krondor, where the player clicks various items/characters on screen to interact with them and for bigger areas you could have a map - so instead of clumsily walking from the hideout to the docks and the tavern, I could just click "harbour" on the map and it would show a picture of piers and a sea-side tavern, with this shady character looming in the alley. There I could click either the tavern or the character and suitable dialogue screen would pop up. Especially since I like your hand-drawn 2d-art.
I guess that's it. There's potential here but I think you would be well served in concentrating more into key-areas, instead of trying to bite everythngl; branching conversations are useless if they always lead to same conclusion - exploration is useless if its dull and pointless - combat gets boring if there aren't many options and its not lethal, etc. For example, JA2 has plenty of combat but knowing that all the time you are facing a real risk of getting your valuable mercenary killed helps alleviating boredom. There is no such risk in here - Griffin can easily dispatch multitude of enemies and even if they player somehow gets him seriously injured, the mind shield thing easily recuperates 10-20 points to him, while the enemies are hard-pressed to hurt him for around ~6 per round. No risk, no danger, no excitement.
I also think that there's a real danger here that the combat turns into similar shitty filler that it is in the Bioware stuff that you don't like - if combat is fun&engaging, it' allright to have lots of it BUT if it's boring and repetive, it's better have as little of it as possible.
Hope this is at least somewhat helpful to you. I don't mean to piss over your heart&dreams here, just my views on how to make your game more appealing to myself.
Edit: horrible typo's and grammar-rape.