Been a little uninspired to make a progress post due to my computer broke down and I haven't been able to make a lot of progress as I'd like. But regardless:

I went with a whole different world design... players can move up and down, left and right as they please.

Skills, gaining exp, leveling up.

You can equip any item as of now. Cuz why not.

New items to interact with: Anvil, furnace, different types of ore.

Attackable NPC. Players can also fight eachother. Players drop items at death.

Adding furnace recipes and anvil recipes is done via inspector in Unity. Everything is handled automatic. What took 10 minutes in flash takes 1 minute in Unity.

Doing the ground work takes longer in Unity, but it will be possible to make a lot of content, fast, when I'm done.

This is how I edit the world, I have made a custom inspector that visually displays the spawn range of each item. The spawn range is also the area where the NPC spawned is to wander.

etc screenies: