Mostly enjoying it, though the anime was crap and I dont like Faldio being around. Overall I'm looking froward to more. Hopfully Capt. Varrot gets in on the action. Rosie x Isara would be fun too.
Figure I might as well, if you were so excited about one.
I do want to point out a bit that you'll probably have to limit the amount of people you include. You're already putting in plenty of plot, and writing little sub plots for every character will slow you down quite a bit. This might just me wanting you to update quickly though, so don't think about it too much. However I definitely think Welkin should be the 'main' character, being the one really focused on. Although I guess a few with Faldio, Jargo, and maybe Vyse wouldn't be bad. Giving Isara a little subplot of her own would also be fun.
As for suggestions. Need I even say it...Selvaria. You have to. Boo, Maximillian! Selvaria's too loyal to him to totally betray him, but I could see her getting frustrated, both emotionally and sexually, by his indifference. I think I remember in the anime Selvaria going with the other general dude to spy on the party where Princess Cordelia was kidnapped, and helped Squad 7 save her. I think a love/hate thing between her and Welkin would be awesome. After all, I think Barious occured before this. A case of her being all pissed for him beating Maximilian, but also being frustrated enough with Maximilian to get hot and heavy with Welkin because of it. She tries to kill him on the battlefield, but they always have hot, angry sex off of it.
Otherwise, I think maybe branching out beyond the first game would be nice. Involve the Nameless a bit, as they did actually interact with Squad 7 in the third game. Riela all the way. Juliana Everhart from the second game also fought in the war at Naggiar Plains, so maybe having her be attached to Squad 7 for a bit would be cool. Considering I've suggested Selvaria, Reila, and Juliana first, I think it's easy to say I'm a big boob guy.
Otherwise...Definitely want Marina getting involved with Welkin. Maybe they could bond while scouting out in the wilderness at Kloden, Marina being a hunter and Welkin liking the wilderness for the insects and animals. Have Rosie become annoyed with Edy and deciding to 'coach' her. Clarissa Callaghan from the third game was assigned to Nameless squad for falling in love with an Imperial Soldier. You could have Welkin snatch her up, as she's a medic and you even made it a point to say Squad 7 is a medic short. The triplet medics are also an obvious choice.
I'm going to close out by suggesting Audrey Gassenarl. While villains in the second game and unarguably racist, both Audrey and Baldren are fierce patriots, could even be called idealists, and were extremely competent military officers. Since you have given a bit of focus on some officers being competent in the Army, I could see them turning up. Audrey is also a very skilled tank commander, and could very well be interested in the Edelweiss. Gallia definitely needed to upgrade their standard tanks after all during the war. Learning it was built and maintained by darcsens could also be the first step to making her lose her racist tendencies. She also worships the valkyrur, thus the reason behind her hatred of darcsen, so Alisa eventually could influence her...Her participating in a threesome with Welkin and Selvaria would also be hot.
Got into it. Hope I gave you a few ideas though. Hope you update soon.
I like your concept as I am a huge fan of Valkyria the game. The anime sucked and I only got through a few episodes. I agree your characters are off. I can't see Alicia as a slut. Also keep in mind that these characters are basically in the equivalent of 1940s Europe, so most should be pretty sexually naive and conservative. Obviouslyyou have to push that a bit for an ero-fic, but keep the era in mind.
As far as the rape in chap 3, the Imperials are basically the Nazis and the Darsen the Jews; there was plenty of rape in concentration camps. Seeing them as animals rarely stops racist opressors from taking sexual advantage. I enjoy non-con fiction so I don't mind seeing it here, though I'd enjoy moslty focusing on sex within the squad. Hope you do some nasty stuff with sniper Maria. Hope my commentary helps.