I've talked about this game before...
There is a lot of could-ofs, should-ofs, and all that.
The problem with making successful horror games with the Aliens franchise is that the Aliens have been revealed... a lot. There is no mystery with them anymore. After 4 movies, countless comics and novels, countless video games - where the Alien and Alien variants have been killed multiple times, you have to tread new ground if you want to do something original. The horror with the Aliens no longer lies in the unknown, so we were going for the environment.
For example, the second or third time you watch Alien, it is no longer scary. My second playthrough of Amnesia was easy and scare-free.
NOT COUNTING JUMP SCARES! Jump scares are not true horror, though they can be used to effectively alter the tension temporarily.
Josh did have some ideas though on how to add horror and tension, and we had several scenarios into the game. Most of us were or had played SS2, Amnesia, and Call of Cthulu, but horror was not the goal of the game, survival was.
This was a game of limited resources and perma-death. If a party member got face-hugged, your choices were to mercy kill them, put them in a sleeper and wake them sparingly if you need them, or let them pop - but the bottom line was that once they got impregnated they had an expiration date.
As for the Alien variations, there are things that are simply expected by publishers and the fan base. The xenomporph variations also have a history in the aliens universe anyway. The first thing Josh and the concept artists did was to create the lifeforms the xenos would impregnate first. We also used some insect themes for the various xeno roles, from drones and scouts, to soldiers and queens. As covered in countless comics, novels, and films, the xenos take traits from their host, the idea being it would better enable them to survive in a dangerous habitat. One of the big mysteries Josh and the writers were exploring was what the caldera and how were the engineers (space jockeys) doing with the xenos.
The goal was not to kill all the bugs, but to simply escape from the caldera where you were trapped. Don't get me wrong, there was still a lot of killing of both xenos and humans in the game. Combat was real time - but we had a companion wheel to context system so that you could issue commands to your squadmates. For example, you could highlight a door with your reticule, and then based on what your squard could do, it would show you your options, like weld door, open door, or if you had a bomb, plant bomb on door.
As far as tech goes, we were using an earlier version of Onyx - which would later be used to create DS3. Our tech was stable, but we had pipeline issues to resolve but by milestone 25 or so were in pretty good shape.
Anyway, it is what it is at this point.