...I personally would be hella disappointed (and effectively not interested at all anymore) if this stops being a Touhou project. That's basically the entire reason I and at least some others got invested. You've pushed through actual conclusions on crowdfunding in the Touhou community, which is super useful, and just because you get some flack and some trouble happens doesn't mean you should totally punt the entire game. I think you should relax, take a deep breath, look at why you started this in the first place, and...well, keep calm and carry on.
I'd love to see the current character roster being kept just out of kindness for the supporters but of course I'm 100% insanely super biased because I paid for a character. *shrug*
When you say the project seems risky...frankly, Saijee, you're looking at a forum full of people that got pretty damn mad at you for reasons that *you* get to decide are legitimate or not. You get a say here, too, dude. Separate the advice from the rage is the best suggestion I can give. Don't take this as a lesson that Touhou Smash is a poor idea...take it as an experience like any other and keep going however is reasonable to do so. Truly to let the sheer emotion that blasted out of this thread roll off your back. Keep your chin up, like you've been doing. It's almost over, really, and then you go back to a sane schedule and doing your dev work. Glean some good pieces of information from the thread, store that in mind, and see what you can do from here.
ZUN gave you a conclusion. Let that give you hope. Find a way to get the money back to people, then decide what to do from there. Hell, let them pay you again if they really want to -- if it stays Touhou, I at least would be glad to just throw in as a donation.
You seem to have been a risk-taker so far...don't let people talk you out of making this the Touhou game you want it to be. It'll take longer the way you have to do it now, but you've gotten the big problems over with. You'll be okay, man.