The research since the last patch has paid off!
I finally have the approach for the new AI-based character engine figured out (though there is still some cleanup to do). You can swap face parts (with expressions), body parts, clothing, and hairstyles, all while using seamless sliders for skin and hair color. That means that diversity should be as good or better than before, but with characters that look like this instead of my laughable attempts at 3D.
I'll be posting a NSFW patron-only post soonish. My first tests with the animation setup were promising, but not ready to show yet.
There is no ETA yet, but "when it's done" is closer than it was yesterday. I'm considering putting off the event rewrite so I can release this sooner, but still haven't decided yet.