For one, I would arrange for the Regalian Empire to have disassembled a few decades ago; the Regalian archipelago would be transformed into a collection of small Ailor states much like the Free Marches in Dragon Age. Various subcultures of the Regalisch parent culture (Approximations made from the geographical location + German/Dutch influence) will carve up the different islands. The city of Regalia would become a trading center and a converging point for the archipelago's politics. Oligarchs and councillors from different regions would collect in Regalia periodically to discuss the region's affairs in a grand council. Prominent citizens who are backed by political leaders are allowed to attend, therefore granting anyone with the ambition and competence the right to determine the realm's direction.

The Kades would be turned into the viscounts of Regalia, owning the city like a landed title. They would still remain the most powerful family in the city itself, as they are expected to lead councils and maintain the central city with competent administration. Rich and well-established citizens can earn the right to buy empty land from the Kades provided that they impress the family well enough, or convince the ruler of another city state to buy land on their behalf. This way, there are more estates and manors dotted around the island.

I'd also create more land in between the continents, conforming more to the idea of tectonic plates to determine the locations of waterways and landmasses. Wind and currents can also be approximated with real-world examples, so determining geographical conditions can be made easier. This could also aid in the formulation of different cultures, since geography is a large factor in societal development. The playable realms such as Fendarfell or New Ceardia would be placed in a further region from the 'lore continents', reinforcing the idea that these places are frontiers much like colonial America.

The magic system would explore the distinction between 'void' and 'exist', categorizing all magical schools between Tearing, Forming, or Existing magics. The concept of tearing or forming plays directly with the void; utilizing destructive magics that require a full connection to the void (Hex magic, for example) weakens the barriers between the existential plane and the void, while 'forming' magics (Celestial-type magics such as light magic) strengthens the barrier. 'Existing' magic (Elemental magic, such as wind or fire or unaffilated magic such as string or lyre) would draw from the primal energies from the world and therefore do not affect the separation between the void.

When the void starts seeping into the world through the over-usage of tearing magic, demons and other such entities start to appear and manifest their surroundings by possession. A thick fog would appear in severe cases, turning locations into miniature medieval Silent Hill-esque locations. This way, there's a system to punish mages who lack restraint all the while creating a more direct possession system with demons.