I think they should expand on some of the species that they only have one of for NPC's currently. Things like otters, owls, and lizards it feels a bit odd to only see one of a species and have it so it isn't even a villager to me.
I know they don’t have limbs, but I think that can be worked around. When they need to hold something? They use the end of their tail. Just wrap that spaghetti tail around your fishing rod and go.
And when they move, their little tail butts can drag along behind them. When they sit? They curl up in a little swirl.
And clothes? Maybe they can wear scarves like the sheep used to in past games