Watch-The-Skies

They could always just add a world creation setting to customize how frequently villages spawn, with the lowest turning them off completely.

As stated above the game is still early in development and undoubtedly the temporal storm and hostile enemies will be improved upon to feel more like a natural story event. As for what they plan on adding in order to flesh out the lore and world, the roadmap lists several features such as villages, procedural dungeons, an intro that will likely provide some starting info about the world to the player and possibly quests. But before that, they need to work on core features that more advanced features will need. By all means it's quite likely that villagers will eventually use the game's physical crafting system for things like pottery and smithing, aka you'll be able to see them working on a project just like how a player does. But before that, they'd need to develop more of the game's crafting system. Take for example the planned features of the homesteading update. Alcohol, fruit trees, animal leashes and more crops/animals are things that would be important for a village and economy. It's just that rn the team is very small and has limited time and resources so they have to prioritize what to work on. Working on the core gameplay provides the building blocks for advanced features and is what will draw in new players, and if the game catches on then they could then hire more people to assist with the game's development. Just a matter of patience.