They most certainly will be upgraded as you get your first upgraded link attack in the tutorial.

The AI for enemies in the field seems fine. The goblins in the cave liked to stay stationary though. At the same time, there's A LOT of them in a few spots, so if they were more aggressive, it would be tough to fight back.

As for technical improvements in 2.0, according to GAF:

-improved foliage/AF and less blurry visuals
-slightly (very slightly) improved frame rates

I only played 1.0 a bit, but decided to hold out for 2.0 once they announced it. I'm towards the end of the demo, and I liked it, but I have a couple issues (many or all of which will probably be addressed in the full game).

I think the core combat is pretty fun, although the game really needs some aerial attacks and a more flexible/higher jump. We've seen aerial attacks in the gameplay showcases in the past, so I'm not worried about their inclusion. Same for magic and whatever else. The camera is better than in 1.0, but could be spaced out more. I like that the MP cost of attacks has been decreased as well. The link attacks are a good inclusion, although I think their execution is a bit...lacking? First of all the camera could be better during these attacks as they can be obstructed by the environment. But as for the mechanics, there's not much to it besides pressing square (on PS4) at the right time. I think there needs to be more variety somehow. I also think the timing is a bit awkward. It's just too fast. Now I have the timing down, but maybe they should have the timing be easy on the first few attacks and make the timing progressively harder with each attack. Right now if you're off by a split second, you can miss out on the attack. Later on I hope you can unlock attacks with the whole team.

My biggest complaint is the lack of fast travel. The Duscae region is really spacious (and we're only seeing a part of it in the demo), and key landmarks have a lot of space between them. Getting from place to place takes a lot of running and it's annoying. You can fast travel back to the last camp you were at in the menu, but that's not enough. You need to be able to fast travel to major landmarks...so all the camps, the cave, the gas station, and the chocobo post. At the bare minimum they should've let you warp to each of the camps once you discover them. Coming from Witcher 3 which is much more convenient, this is not very good. The full game has the car, but that's useless in a field, so hopefully they can put in some fast travel too.

It's also annoying when Noctis gets tired and slows down when running. There's no stamina meter that's depleted...he just gets tired. Yeah running without a break isn't realistic, but for convenience, they need to just get rid of this. Or allow you to have an instant chocobo you can call on like Roach in Witcher 3 or something. Or more warp points (you can only warp to places in combat. In the field, you can only throw your sword on the ground).

One other minor complaint is when you run and slide under an area, Noctis just stops moving for 2 seconds before you can run again. They need to allow you to run immediately.

One other thing, I'm curious to see how the character progression system they choose to implement functions in the full game.

Anyway I like this more than Type-0.

I have a few more comments.

First of all the graphics are very good, but if I had to make another Witcher 3 comparison, there is a noticeable difference in the clarity. FF XV is 900p vs. the 1080p Witcher 3. I also think faces/skin gameplay models need some work, but they might look notably better in 1080p, not sure. I hope the graphics don't take a hit because of the resolution. They're not on Luminous 2.0 yet, and I hope when the full game releases they manage 1080p with a close to consistent 30 FPS on PS4.

The dodge roll I thought would be a nice addition when they said they were adding it to 2.0. But after playing, it doesn't seem to have much purpose. You can hold down L1 and dodge like every attack. I believe this takes up MP, I really didn't notice, but if it did it doesn't drain much. Actually since the dodge is automatic with L1, there's not much reason to use the manual dodge roll. It seems more risky in fact, especially if you're being attacked from multiple sides.

Finally, the lock on is weird. You can lock on with R1, then there seems to be some kind of "hard" lock on with R3. But I didn't notice a difference between R1 and R1 + R3...