I agree with your assessment Jason, this game has the potential to be something great, but all of its problems really hold it back.
There's one kind of major thing we forgot to discuss: loading screens. The game world is separated into 8-12 segments, with a quick load screen when traveling from one to another. This isn't an issue in itself, as I'm sure it helps keep the game running smooth. Where it becomes a problem, is when fighting a monster near the loading barrier. The monster can travel past that invisible wall, and then become impossible to attack. It is also too common to be knocked into the load barrier, and then enter another area. When returning, your character appears in the area before the loading finishes, and you can be hit before you have a chance to move, or even see the attack. It's yet another layer of frustration.