Reading Visual Novels has been a hobby of mine for a while now, Steins;Gate and Fate/Stay Night being my favorites. I’d be very interested to see more Visual Novels that use 3D models like the ones for the 3DS, since most of those never see a western release. I wouldn’t imagine making it would be very challenging, I’d personally see writing a compelling story to be the most difficult part. Another neat thing would be integration with VR headsets since most Visual Novels have the reader seeing from the protagonist’s perspective.
I personally see Visual Novels as a genre and Dating Sims has a sub-genre. Dating Sims normally involve stats, lots of interaction, a day/night system where your days are counted, romance meters, etc. There are plenty of Visual Novels (Some that have multiple paths, and others that are completely kinetic) that are about romance but not a dating sim. One thing that is giving that stereotype more fuel would be the Visual Novels that are very popular on steam, as a lot of them are very erotic-themed. These are the only Visual Novels that most people have seen so that’s what their first impression of the genre is.