Hmm, I don't really want to lock this thread but it does seem to do a lot of going round and round.
So to clarify as much as possible; no there won't be any game-overs in the sense that you lose the game, or that Krystal can die or anything like that. It is however a game, so you have to "defeat" various characters in order to progress, so if you fail to defeat them on first try then you will have to try again, but that's not really the same thing. This is really all that is meant by a setback, as you're not beaten, you just haven't succeeded yet, there may very well be a scene to highlight some of these, but only where appropriate. For example, if Krystal didn't manage to beat a boss first time round, and there was no way out (no exit) then it might be worth showing how Krystal escapes to try again. Very rough example, we don't have anything we're likely to put in any time soon, and if we ever do it may just be done retroactively anyway.
But to summarise; no losing, no death, just trying again.
With regards to pregnancy, the fetish really is wanting to see it for the sake of seeing it. I think most people don't have a problem with pregnancy, but it's a very daunting thing if it's not something you want at the time, most people as a result have pregnancy in the back of their minds as a "bad" thing, because if you all want to do is fool around but through bad luck get a kid instead... I think it's partly a matter of timing
Either way, given the nature of this game and the fact that for many people it would be a turn-off, pregnancy in LoK will fall under fetish content. Don't mind at all if someone adds it in, indeed the way characters will be set up it probably wouldn't be too hard, but we're not going to be the ones to do it as it doesn't really fit our aims for the game.