So a couple additional comments:
1) So I absolutely LOVE seeing struggle sequences different than the standard TCAI model. The game is much more of a chess match when you have to think through the struggle order in addition to the rest of the combat math. I'll also offer that changing the standard of "5 tokens to win" is another exciting idea. Turning off Unchallenged, increasing the counts, etc. Good stuff.
2) Pickman's Model: Should likely say "with no printed struggle icons" just as a clarification for all the rules lawyers out there.
3) The Colour Out of Space: I like the idea, but if I may assume, the story could result in the loss of 5 characters (including a combat kill)? Who would ever run it? Will it just sit in play?
4) Nameless City: Do players still have success tokens on the card after succeeding? Not sure when they 'come off'
Lastly, a Story idea I had years ago. What about a story that said something like "Players may only gain a maximum of 2 success tokens per phase at this story. Characters at this story do not uncommit until a player succeeds at the story." My idea is that there would be a long, buildup of characters, like armies gathering. Thoughts?
2. I believe that icons should only be added when specified. I could add reminder text that it doesn't get any icons, but... think people will power through just fine.
3. The Colour Out of Space is... an exercise in thinking completely differently of about how to approach a story. Yes, up to 5 characters could lose their lives (remember, you actually have to WIN the struggle, ties and losses won't cause the story to trigger)... so I don't expect anyone to bother sending a mass army at the story. Unless they were ok at covering the losses. But, by putting the Skill challenge first, it's possible for the active player to skill pick up to 2 tokens (likely only 1, but still) before any struggles resolve.
So, characters without terror icons or no icons at all are going to be your friend when comitting to Colour Out of Space. Get in there, get a token for skill, and hopefully lose a character to insanity to cause your opponent to lose a character. If you get to combat, it'll be a trade off, each player will lose a character. So the story really speaks to faster decks in the first few struggles, but, Arcane and Investigation will eat faster decks alive.
On the flip side, as the defender... how to defend can become a major challenge and can work out to their advantage but either aiming for ties or "letting" and opponent get ahead so several struggles are lost.
Ultimately The Colour Out of Space is a story you can chip away at with what you would normally consider you're weaker characters. For two reasons, 1, don't care as much if the bite the big one. and 2, they're the best at limiting the damage. It's a card that makes bad cards better and good cards a little worse.
4. I think you might be confusing "winning a story" and "succeeding at a story." When a player wins, the story it is moved to the won pile and the tokens are indeed removed. However, succeeding is when the active player wins the skill challenge at a story (thus placing 1 (2 if unchallenged) success token).
5. I really like the idea of not being able to leave until it's done, but like above you may want to switch 'succeed' with 'win' hehe