I don't really know what I'm doing.
As far as rules go, this is okay. However,
don't retcon. Here is what I mean. It is fine to
not know a rule, and fine to make up a rule on the fly so long as everyone is clear on that rule and ready to play with it. However, once you find out what the "real" official rule is,
don't backtrack. Don't undo what you've already done. You can use the official rule going forward, but leave the past in the past. If you (or players) learn that a rule on the books would have been better, oh well. If you start going back and revising (even going back just 5 minutes), you'll find that your players
constantly want do-overs. They will comfortable, quickly, with the idea that bad stuff can be avoided by whining about the rules.
DO NOT LET THAT HAPPEN. Fun will die.
I don't really know how to make everything connect and feel like there in a world that remembers them.
Have you heard of the concept of emergent gameplay? It happens a lot in sandbox games, and it's often actively discouraged in railroad games. The idea is this: build off of what emerges from the actual gameplay that your players do. I'll give you two examples.
First, my players were on a simple "save the princess" quest -- they had heard that a particular town was suffering from a few kidnappings, and needed adventurers to stop it. So the party went to that town. However, at the gates, as it was a minute past sunset, the guards were closing up for the night. The players
really wanted in, so one player steps up to the guards, says some antagonistic stuff, and rolls for intimidate. He does very well, and the guard freaks out and lets them in. However, knowing that he has just let some bloodthirsty thugs into the city, the guard quickly rallies he fellow watchmen, and they find the party and capture them.
None of that had to do with the "save the princess" module -- they intimidated guards that should have been their allies, and it felt like a reasonable thing for the guard to back down and get backup. So now the party is completely off-the-rails, not doing the princess quest. They're in jail. And unfortunately, one of their party members resisted, and died. So the rest of the party is
pissed. They feel the guards are completely wrong and they are completely innocent.
Now on to the second example. Same party, same problem. They "wake up" in jail, stripped of gear and bloodied. They try to break out, but fail. Eventually, a man named Lord Seren opens the door to the jail hallway, and strides down the hall to the cells containing the prisoners. He explains that they have behaved in a threatening manner toward the guards, and resisted lawful arrest, and will be tried on both counts.
My thinking was twofold. First, I wanted to discourage lawlessness, so a slap on the wrist seemed appropriate. Second, I didn't really see this whole jail thing going anywhere, so I wanted to get through it quickly. I thought, give them a trial, count "time served" and let them go. However, the players
didn't let it go. They hurled accusations at Lord Seren, complaining that his guards were out of control and murderers. When Seren didn't agree to this interpretation, one of the players blurted out, "I say to him that I vow I will kill him with my own hands, the moment I am free."
At this point, I stepped back and looked at what had emerged. And that was, we had found a villain that the party would
hate and fight long-term, over many sessions.
None of it was planned. All of it just came from looking at how the players interacted with the world, and making decisions that seemed reasonable.
Oh, also, sidenote: the adventuring group was largely chaotic neutral with 1 chaotic evil PC, and Lord Seren was lawful neutral with lots of lawful good paladins at his command. So it was interesting to consider the "good guy" the villain in this story.
Anyway, over the course of many sessions, they continued to bump into Lord Seren, always unplanned, always utter chaos, always fun. It never had anything to do with the modules I ran. It just... happened.
So my advice to you is to make sure the monsters & NPCs have personalities. Most will never see the light of day, but a few will. Keep in mind how common people react to grand displays of power, and think about what rumors would happen around the PCs, and who would take note of their ascension to power. Remember that people who are slighted hold grudges, and monsters that get away from murdering PCs will eventually return with an entire tribe to back them up.