I kind of agree with this. There were definitely opportunities to use other races where it would have made more sense than purely humans.
I would have kept Cyseal pretty much exactly as it is. It's a very human area.
I would have made Silverglen a relatively even mix of humans and dwarves. Dwarven miners make a lot of sense, after all. Brandon would have been a Dwarf, as would Bjorn, the smith whom you rescue if you give a Blood Stone to Alfie. Natia would still be human, however, as would Lawrence; if Lawrence ends up a potential victim of mob justice, dwarf vs human racism could come up in a different way than in the Elf-Orc Blood Feud from earlier.
This would also mean more diversity in the various cultists you fight. A good number of dwarves would be "true believers" and thus you'd see a great many in robes at various stages of the game. Same uniform as the humans, same core beliefs and fervent devotion, just a different race joining in. The geomancer from Sacred Stone might even be a dwarf herself.
In terms of elves, I'd only add one living one, but I'd refer to a bunch of dead ones. Hunter's Edge would be described as a relatively even mix of elves and humans before its downfall, with "wood elf" culture being a highlight of the town's past. Madora would view the situation romantically, as she loved the elves she lived with for their emphasis on the natural over artifice (and, to Madora, all artifice is Source-related somehow). The (formerly human) undead merchant you meet at the town gates, however, would give a less romantic assessment when queried. Then as an extra touch, instead of Paintings of a Man, sometimes you'd steal Paintings of an Elf (perhaps worth slightly more). However, since Hunter's Edge got massacred, the only additional elf you'd actually meet in the game would be the barman at the inn in Hunter's Edge, who as far as he knows is the last elf alive on the continent.
Orcs are indeed mostly antagonistic in the game, but it's explained by the lore. The All-Mother wields a huge amount of political power over the orcs, and thus the orcs have gone down a twisted path overall. This doesn't make them inherently bad (Victoria), but they're a scary race. As they should be.
I feel imps are covered in enough detail and need nothing further. Same with lizardmen; just because they're part of the setting doesn't mean we ever need to see one.
