I loved the nothic. I adopted stream-of-consciousness creepy statements coming out of the shadows, references to it being able to taste the PCs' emotions, vague glimpses of its form in the darkness. I didn't bother rolling for its Weird Insight - it automatically knew all their secrets. Fun.
I thought it was an inspired choice for the module. It's a little-used creature, and not well-known to many players. My 20-year-veterans genuinely had no idea what the heck it was (they've never encountered one before), and were completely freaked out by it. They had no idea if it was a "level-appropriate" fight, so were immediately running scared (attempting diplomacy, hiding in the shadows, begging for mercy). When a fight finally erupted, every PC's first action was to make sure they weren't the person in the front of the party... which of course didn't help them against Rotting Gaze...