This is a great concept and I like it a lot. I voted for it on Steam Greenlight (how much will it cost?) and I have some feedback. The dictionary seemed pretty expansive-- often I was able to create words I didn't know existed-- but I typed in "yid" (which I guess could be offensive) and it was not accepted. Was this word left off on purpose? The word "porn" was accepted...
For thenoodge, maoi is not a word, however moai (mo'ai) is.
I think that the idea of an endless mode would be interesting, being entirely randomized with bosses making appearances, chests, merchants, etc. There would be rewards the further in you make it.
A time attack would also be possible, with you getting time for beating enemies and whatnot.
I was able to type "Miyagi," but nothing happened. I don't know what I was expecting.