Just to tune in....
Your project does sound rather large in scope. When you factor in all you want to put in there, you get clearly into AAA territory.
1) FPS Perspective: this is going to increase your needed art budget a lot. As soon as the camera has to move nearer to objects (as opposed to staying rather far away like in an RTS-like perspective), you will need higher resolution textures and more detailed assets, as well as a better LOD system.
Not saying it isn't possible for a small Indie game feature an FPS Perspective, or that lower quality assets HAVE to look crap when the camera is close. Just saying it will increase the arts budget, thats all.
2) Mixing art styles: as said before, this will likely increase your art budget a lot... ESPECIALLY when you want to integrate these styles into a full 3D FPS Perspective. Non-Photorealistic 3D assets can save you A TON of money, for example when doing human characters. They can also cost you more for environment props that can easely be scanned or at least have their Textures generated from photo references versus hand sculpted and painted.
But some of the styles you listed do not mesh 1-1 with current 3D technology, you would have to do some shader magic as well as get a very good animator to make them look the way you intend them to look. Again, will drive up your cost.
3) Networking: Cost factor #1 besides art nowadays (and marketing, if you include that)... It is already expensive to deisgn and maintain networking layers for game types that are pretty forgiving for control lag and "correction warping"... fast paced first person shooters are NOT among these games. Designing a networked shooter is quite a feat, especially one that satisfies the hardcore twitch shooter fans.
Again, driving up cost.
4) RPG Elements: while not on the same level as the other things, this is also a cost factor. RPG Progression elements result in 1000s of combinations that need to be balanced and tested, leading to a combinatorial explosion in the amount of game design and testing that goes into it... programming such elements might not be that hard, making sure everything works as intended will take A LOT of time.
You guessed it, driving up cost.
Then, I am not quite sure your game idea really has been thought through enough.
1) Horror games for kids, Really? Or do you mean a horror game for teens (which is quite a difference)? What is the target group? Most teenie slasher movies actually market to the 16+ age group because of violence and all. Is your intended age group below that (in which case I would cut blood and vomit instead of trying to cover it up, just like most fighting games do nowadays)?
Might be an additional point, but fits in here nicely: Ultrahardcore Difficulty for kids, really? While I have seen some kids baning their heads against virtual walls for hours on end, most of them would fling the controller through the room and throw a hissy fit after their third try, and might never come back to your game. That is certainly not what you want.
There seems to be a huge crowd that likes hard games, but I would say again age 16+ (or maybe rather guys in their tweens ort thirties).
2) Mishmash of styles... while I find the idea to make monsters, or things like a characters imaginary friends, ghosts, whatever, look slightly different and out of place, I am not sure that you are not going WAY to far with your idea. This will most probably not look cool and scary, but just weird, IMO.
3) RPG Shooter and Horror.... Shooter and Horror games have started to deviate quite a lot from each other in the last few years as the most powerful element in scaring people is taking away conrol from players, especially their ability to fight back. Shooters still are all about giving players control and cool weapons to blast hordes of enemies to heavens.
RPG Elements will just work against the horror element in this case. RPG Elements are in most cases a positive statement: your character WILL get better over time. You WILL get better tools to battle enemies in the future. If you return to an old part of the game with your overleveled character, you stomp old enemies in the ground like ants... so most of your already visited areas got just robbed of their scariest elements, the monsters. And once a player has seen that more than once, the illusion of horror is broken. Just level enough, and you can enter a new area without having to worry.
Not saying it cannot work. But you need to be VERY careful taking from your inspirations what adds to the expierience while leaving out what will distract from it or destroy it. For example the RPG elements shouldn't have any influence on your powerlevel against the games enemies, as you will loose a lot of the horror impact that way.
Make sure the shooter elements do not interfere with the horror elements (for example by making ammo very rare, and forcing players to make deliberate choices which monsters to attack).
4) Graphics from 2006, in 2023: okay, I was a little mean when pulling together these two statements of yours into one single timeline. But really, going for photorealistic graphics when you know you cannot afford it is not going to work.
Instead you should either go with a proven, Indie friendly art style, or try to come up with your own simplified style you KNOW you can afford (which is why prototypes are so important, and not only gameplay ones).
Stylized graphics from 2006 can still look pretty up to date today... there is a reason why all this Pixel art 8bit nonsense took off so much after all.
Photorealistic graphics from 2006 just looks dated today. And imagine how it will look in 2023.
Lastly, it is my personal opinion that you have to be very careful when taking AAA games as references. Take small parts of it as inspiration, not the whole thing.
Do you think the way the RPG System as implemented in Destiny is slick? Take it, break it down, see what could work in your horror setting, and ONLY take the parts that fit.
You like the insane difficulty curve in Dark Souls? Craft your own, taking hints from the Souls games, and make sure it fits YOUR game instead of trying to create "Dark Souls, but with Ponies!"