Here's my thoughts, and this will likely be my only post in this particular thread:
1. It's a good point about the standing stance, I wish I'd thought of that earlier. I might someday change that some.
2. However, you really don't stand around much, so it seems a pretty minor point.
3. Also, having characters hunch over too much would make their hitboxes fairly misleading, I suspect.
4. The art will always have "room for just a little more improvement." This sort of improvement is something I do when it is within my grasp, doesn't detract from the rest of the game's development, and actually leads to a better experience. But in general something massive like "add a lot of frames to all characters for them to have breathing while standing" is just the sort of thing I'd never remotely consider unless I had a team of artists to do it for me. Imagine yourself sitting down to work on breathing animations for 36 characters for 1-2 days straight, and you'll understand why.
5. There is a distinct point after which visual improvements cease to really matter to the bottom line of a game. I'm playing Ocarina of Time on the 3DS at the moment, and I love the new way it looks. Much more modern. However, the changes, aren't really that notable in other respects, and the game itself isn't actually any better for it. They spent a lot of time polishing up the art for that game, and that's... whatever. I bought it because I wanted to play it on a handheld device, not because of that. So did a lot of people. But if they had taken that same amount of time they spent polishing the art (which must have been immense), and instead added in more content and side quests and such... holy cow, that game would have sold like hotcakes. What a system seller it would have been! Reviewers would have griped about the lack of updated graphics for that classic game, but ultimately nobody in their right mind would choose the art over the content.
6. We are good at content, and programming, and other things of this nature. Art is something we are less good at. Consequently, doing things related to art takes us longer for a lesser gain in overall game quality, and the utility of that varies from case to case. Redoing the skies and the HUD and such was a big win. Working on cave backgrounds is easy and a big win. Adding new enemies and spells with cool effects is a big win, because it comes tied with functionality and adds to immersion. Redoing existing assets endlessly, when it is 100% assured that some people will still think they are crap... there's a limit there to what I'm willing to do.
7. Are we limiting our potential market somewhat by doing this? I'm not sure. Maybe? But if someone cares about graphics above all else, there is no way I could ever make that person my customer to begin with. I am out to get customers who appreciate new ideas, and fun gameplay, and all those sorts of things. And I'll give them the best art that is reasonably within my power, and as time progresses I'm getting better at doing that. But with three weeks left until 1.0, I'm not planning on any substantial revisiting of existing art aside from easy and obvious things like the cave backgrounds.
8. If this game sells like hotcakes and we make millions of dollars, I'll hire a couple of artists to make things look even better. So the best way to get the quality there to improve is to tell all your friends so that we can afford to get the talent we'd need for something like that.
Hope that makes sense!