This is a perfect horror experience!

This game is AWESOME!!!

Although I found the easy explot to win.
See... you didn't hide Peanut around the town, you just coded him so that there's a chance for him to appear each screen change. So all you gotta do is go back and forth between two parts until Peanut or the monster appear. To fix this you could maybe code so that the dog can only appear in certain areas a dog would usually be like in the park that's south the map and at the same time have that "random appearance" system. Another solution I can think of is by locking the dog behind an item that you have to get to then have the chance of the dog appearing, maybe something like a chew bone or ACTUAL peanut butter to make honor to his name, and have that item only spawn in specific parts of the map that aren't even remotely close to the house like behind a tree far down the map, around the bloody park down there too, close to the church, close to hell, or maybe close to the dangerous highway at the far left of the map.
The monster easily dissapears just by going to any house and repeatedly entering it until he no longer appears.

This game has the potential and the neccessary ambience and mechanics to hide MORE spooky secrets!
Example: I saw some notebooks scattered around but they're just decoration. BUT the books could be a great opportunity to hide some lore of the monster or maybe another ending would happen if you collect them all. Or maybe you could access the library and get bonus lore once you collect all the books. Or maybe the store is already accessible and talking to someone inside it would give you the clue to collect all the missing books.
There's a church that's innaccesible but maybe it could be another way of killing the monster, by guiding it inside holy territory and letting it burn under the light of the Holy Spirit. Or maybe by making the churge accessible and taking a cross from it to then take it to the pit would allow you to survive hell and maybe even save the husband of the woman with the two children.
Maybe another silly ending could be that the dog gets ran over by a car.

The potential is almost LIMITLESS, keep going :D!!!