This is definitely better than the previous chapter. Not only did you introduce more characters that live in/or around the town, you also had the protagonist interact with old characters and have him explore new areas along with re-exploring old ones. You also gave two parts of the games two separate choices, with the latter part (specifically whether to burn down Anne's house for the Observers or not) determining one of two endings of the game (they're largely the same, but the difference is how the hermit Lynch is treated by the protagonist), adding some replay-ability to your game. Awesome I'm now going to play the final chapter and see how the protagonist's journey into Cupertown plays out.