Hmm, for a good example of a creepy cartoon game, look at Knock Knock. Also, for the mirror thing, almost the EXACT thing you said was done in Doom3, and it was terrifying. Plus, if we are going Obscure Lovecraft, bring in Cythlla and Yog Sothoth. Most people are only familiar with Cthulhu, Gnarly, and Hastur. The King in Yellow would be a neat thing too, as is the Hanged King from SCP. Also, for monsters, if going Lovecraft, shy away from Shoggoths and Deep Ones. They are too familiar to most people, and the emphasis is on the bizarre and unknown in Lovecraft.
No, there will be Shoggoths, and Deep Ones... but they're going to be the more obscure **** you could find. [Also Doom3's was a jumpscare, an effective one at that I might add. I was thinking more slowly creeping towards the player and as soon as they start moving
it follows them] But yeah, if you know me, you'll know I want to shy away from Cthulhu; mainly due to the fact that Cthulhu should be dead and only talking to you through dreams, so I might have Cthulhu randomly start whispering to you the deeper into the lore you go. [I didn't really care for The Call of Cthulhu, as sinful to HP as that is]
Also Yog Sothoth is the major part to getting to Azathoth, since Yog Sothoth is basically the only way of getting to him. And the reason why I've wanted to do The King in Yellow, is because The King in Yellow is the avatar of Hastur; and since you aren't supposed to say his name (and since The King in Yellow is a creepy ass book) I'd thought that including a big secret quest that leads to bigger things would be neat.
But now that I think of it, maybe some doing obscure horror for this game might be the best bet.
I mean everyone has heard of Cthulhu, The Statue, and The Raven. But why not have more obscure references or works in there; why not have a level set in the tower described in HP's The Outsider, or have the bone dimension from Rats in The Walls.
We could really go all out if people start fishing for more obscure works, or creating their own monsters.