Dude, mjemirzian. No offense, but you and iconoclast are two of the best game players I've ever seen in my entire life. You run through hard modes of games without getting hit once and do no-upgrade runs on srw and iconoclast and originalz do 1CC runs of hardcore difficult shmups all the time. I respect that, but I don't think you really represent the average gamer.
I'm playing Knack on normal and the game is decently tough and a good challenge for me. It's tougher than GoW Ascension on Normal for me for sure. I die about a dozen or two times per level depending on how much attention I'm playing and how high risk/rushing I do in combat. Then again I do handicap myself slightly by not using the sun power "win" attacks unless I repeatedly die on a combat scenario a few times to the point where I'm annoyed and just want to get past it and then I'll use my sun attacks. Otherwise I try to get through each combat setup just using dodges and attack.
I do think the game could've used some improvements definitely. Like each powerup should've had unique attacks. Fire should've shot fireballs, Ice freeze attacks and you should've been able to change between forms and have enemies with weaknesses to different elements. The secrets upgrades should've been done better too so that it's not all pushed to the end of the game and it feels like you're never getting upgrades for the bulk of the game. They should have made it so you're continually rewarded with meaningful upgrades on a regular pace throughout the game like with longer life/sun bars, more damage, new abilities, etc...
If they do a sequel (which they might since it's a launch game and it'll probably sell ok despite all the terrible reviews; especially since word of mouth is really good for it), I fully expect them to add all that stuff in. Also make more variety in the levels and make them less linear. 60fps would be nice too. For a first game, so far I'd give it about a 7.5/10.