genocide and pacifism will be an important part on the game.
of course, unlike undertale, there won't be a "spare" option on the fight menu, but instead, the ending you'll take will depend on what items you have on your inventory.
an example, on dream 1 there will be a cleaver lying around (just an example, this might not be the item you'll have to take on the final game), if you decide to take the cleaver, you'll activate an event that will actually kill the boss and trigger the first part of the genocide ending, if you decide to leave the cleaver there or drop it somewhere, you'll use dialogue instead of violence to convince the boss to give you the diary so you can get out of the dream.
you cannot distort the endings by killing someone on certain dream and leaving someone alive on the next dream, if you triggered the genocide ending, the game won't let you go to next room until you get certain item the will trigger the next part of the genocide ending, if you triggered the first part of the pacifist ending, the items will be completely gone from the map, you'll be unable to take them.

the game flow will run normally, no different dialogue will appear after you start killing people, only the boss dialogue will be different, until the last dream, where you'll have a character that will judge you, both routes have different dialogues for that character, and you'll unlock something special if you manage to finish both of the routes.

(the game won't be more punishing depending on which route you choose by the way, the level of difficulty will stay the same in both routes, since you can't level up.)