I'm glad you like it.
I find that interesting. For me getting a better weapon after a fight was more like a reward rather than a "regret". On the other hand you could always try to find a better weapon before the fight (applies to Borderlands, too).
It's good that you didn't have any ammo shortages. I tried to counter that by having enemies drop random ammo.
I'm not quite sure about this but I had a similar thought. I want the higher level enemies to be noticeably stronger than the weaker ones. But of course enemies shouldn't be a one hit kill (except for the Cyberdemon maybe). On the other hand the shield gives you basically "free" hit points, so that's a plus.
The demon staff was not really intended as a "normal" weapon. Instead it was added so players could also play this mod with maps that have lots of enemies (slaughter maps in the extreme case, but I wouldn't recommend this). Using it on maps with few enemies will be very slow. But that's the intention: It should only work if many monsters are present.
The thing about weapon models was brought up before. Maybe in the future. 🙂