I feel like this is not so much a bug as just a fact of living in medieval times. They drank more booze than water. I say they should keep the ale consumption as is and just make it easier to grow hops. I want my villagers sloshed to the gills in historically accurate fashion god dammit.
the character creation is kinda superfluous at this point, you can spend loads of time naming them, making a coat of arms etc. but in my experience it never comes up anywhere, nor does your leader character. there's no real plot or politics to speak of, it's just a medieval city simulator. there are some policies you can enact but the only impact is just 'raise taxes = people sad' and the like. maybe in future more stuff will be added but at the moment it's not got anything i would consider problematic
there are already mods to change things like character avatars so you could potentially just make whatever character portrait you like and put that in the game