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Probably not an easy feat to get to Lua or C# speed.
ASM FTW.

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Additionally, there's also many more people that might already be familiar with C C++ C# or Java (or ZScript), in which the typededness is basically the same. ..err, is that a word?
It is, but it's spelt "syntax".
Beside the syntax, there's also something that could be called "expressiveness". I'm currently working with the groovy language and while it's mostly based on the syntax of C++/Java, compared to Java some things are a whole lot easier. (An example might be that a language with the word "computer" is more expressive than one where you have to say "box that has buttons and cables and makes a noise"). Even within the same syntax languages can be better or worse for certain tasks. For us, expressive could mean that things people often want to do like "move Link" or "change a tile" are coded into the language as functions.
I've been away a few days and the activity here is incredible. Yes, we're definitely on to something.
Here's another suggestion of mine just randomly thrown in. It was mentioned that the flag system needs a revamp but also that its ease of use (compared to scripting) is a strong point.
A possible middle way is with an event system. An event consists basically of a condition like "bush at coordinates (3, 5) burned" and an action like "replace bush by stairs". What I liked about the existing system was its point-and-click approach. I could imagine an event builder where you first click on a tile on the screen, then select a weapon or similar condition like "burned" or "walked on", then you can set one or more actions that could include clicking a tile - the same or a different one - and selecting another tile to replace it with.
Possibly a menu item could highlight all tiles on the screen that have conditions or actions attached to them much like "F" currently shows where flags are set. Features like this are what can make an editor so much easier to use. Maybe we could even have some kind of graph showing how the actions relate, but that's if we have development time to spare.
We could do away with the 16 per screen limitaiton, include chaining actions (the equivalent of putting flags on secret combos - one action that is only active after another one has completed) and introduce the ability for a screen to have several actions in parallel, so on the same screen you could burn bush 1 to get stairs 2 or hit pole 3 to get passage 4 open (in any order) and so on.