The environment getting harsher is something we definitely want to happen, and a lot of what you’re describing is similar to what we’re planning on, but with some extra detail we’ll likely snag 
The concept GlyphGryph has been working on is that there are various zones that are aligned in one way or another, and as time progresses that alignment becomes more and more severe and the zones expand. If you want to survive long term you’ll have to defend your patch of normalcy against the hordes of undead, fungi, plants, and nether creatures, either that or give up and learn to live with them. So the stuff you’re describing would happen in nether-aligned areas.
The thing about fire whips is they really don’t accomplish that much, they do in fact create a ball of fire, but it’s too diffuse and short-lived to accomplish much of anything. If you hit something with them just right, they could light clothes on fire I guess since they’d basically spray you with gasoline then ignite it, but it’s not that much gasoline.
The magic and fantasy themed stuff we’re pretty strongly against. It just doesn’t fit with our view of the game world. For the demonic creatures, that might mean re-theming them a bit to be more sci-fi-ish alien creatures rather than being blatantly fantasy-themed, for spells and such it means they’re pretty much out.