That stuff is also very nice
The village basically shows what I really love about games like Minecraft: The ability to create little really atmospheric worlds out of nothing. While the houses themselves aren't as spectacular as some other, more complex buildings, the whole village looks just so sweet
I think if you weren't able to walk around in those worlds, or couldn't even build them from that perspective, the whole game would lose a lot of its charm.
Also, I love that even I, who always fails at Garry's Mod because of a severe lack of creativity, can have a lot of fun with this and build cool stuff, as it's so simple, yet unrestricted
As you mentioned the terrain: Maybe some time in the future, if the level generation algorithms allow for it, there could be some simple options for the level generation. Like how hilly it is, if there are few or many cliffs, few or many underground caverns, etc.
I also thought that it would be cool to have a smaller kind of blocks, like one that only has 1/4th or 1/9th the size of the current ones, so you could build proper furniture, other decorations and yet more detailed constructions. I think that is more or less impossible right now at a proper scale. Though, maybe that wouldn't suit the simplistic design, I'm not sure.
Lastly, like I said earlier: Torches! It would be cool if they could simply light a specific area around themselves, probably with varying brightness depending on distance.
Now, I wonder if it would be cool to recreate that dwarf upright and underground, so he really feels at home..