I have quite a few suggestions...
Try to make the game as different as possible from TDD in general atmosphere (sounds, lighting, music, sanity effects, general level design, puzzles). This way, by having an original experience, old time players can also get immersed (and also do not get bored).
If you do not have ideas on how to instill fear, I suggest looking for inspiration in the library. To name a few horror writers: Edgar Allan Poe, H.P. Lovecraft (the game engine isn't called HPL for nothing
), Ambrose Bierce, Clive Barker, Stephen King. Considering that your are trying to create episodes, focus on the short stories. Try to look deeply into what creates atmosphere, tension and dread, and think about the way they all culminate at a certain point to give the reader a powerful shock.
Another element that is important for immersion is including elements of the culture and society of the period in which your story takes place, giving players the sense that they are living in that time. Take Alexander and his castle for example: his type is the a 17th-18th century scientist (even though story takes place in 19th), who dabbles in all areas of study: chemistry (remember mixing substances?), anatomy, botany (studied toxic fungi), mechanics (elevator and others) etc. etc.
You say the PC is a writer? Make him a fan of one of the aforementioned horror writers (maybe you could also quote them in the loading screen). He is looking for a doctor... so try to understand how medicine worked in those years, what tools or medicine he might have used or what doctors did not know then and wanted to discover. Implement it in the story. A baron? Again, try to discover the life of barons from that period (maybe even search for stories about shady barons).
Consider your level design a bit, that it might make sense. Maybe some pictures of real castles and dungeons could give you ideas? Areas should certainly feel realistic and well thought, but they don't necessarily need to connect to each other (having a completely realistic castle might be boring and too large). Again, look at how TDD had large areas that made sense.
It might be worthwhile to get some facts straight to give the player a sense of reality. When exactly does the story take place? In what country/region? Maybe add a bit of flavor from that region to the story? A folk horror tale might fit in. You could flesh out the 2 main characters, the doctor and the baron and give them some kind of back story.
To do everything "right" would take hours of study, but don't forget that the player isn't an expert in history and you can improvise without giving the sense that something doesn't fit.
I hope I've been helpful in some way. I wish you and your team the best of luck!