I want to bring up "the Don Bluth principle," as the Nostalgia Critic calls it, as it is quite relevant to the subject of happy endings, cliffhangers and such. Basically, the principle is that, as long as you have a happy ending crowning your story, you can usually afford to make it VERY dark, and yet still get people to leave satisfied, with the bonus that your story has been far more emotional than it would have been if you'd had to be reserved. The happy ending is both an atonement for depressing plot points, as well as credit to actually introduce these into a story, and Aquaria has a few.
The reason I bring this up is that is to highlight an important question anyone making a story should ALWAYS have an answer for: "Where are you going with this?" When you break a story down into its component parts, you end up with lots of snippets and anecdotes, and you'll notice that very few of those are actually interesting on their own, and many are outright unpleasant. It is the story they form when structured together into a coherent narrative that we want to sit through, and as such every element in this story has to contribute something good, and every element's negative effects need to be counteracted by another. A dark, depressing plot point is unpleasant to sit through, but if at the end of a story I look back on it and think "Man, that was nasty, but it made for a compelling story in the end!" then the unpleasantness has been worth it for its narrative value.
One of my greatest failures as a writer was when I started a story in an incredibly dark manner and kept making it darker with the intention of turning it around and contrasting the darkness with redemption. The net result is my readers balked and refused to read until the good parts, and I had to literally beg and reassure them that I really WAS going somewhere with this, it wasn't just nasty for nasty's sake. You NEVER want your audience to get to this state. Ever. I don't care if this is dark story with a dark ending taking place in a world half empty. If you lose your audience half-way through, you have failed.
Of course, the above paragraph doesn't apply to Aquaria, as that game's sheer amazing quality makes it not just easy to stick to the end, but actually kind of hard to stop

I managed to devote over 20 hours to it over the span of 3 days, and that... Can't be good for my health. But it was so worth it!
Back to the subject of endings: If you don't end your story on a positive, conclusive ending, you just take so much away from what may have otherwise been a very solid piece. When a story ends in such a way that I end up questioning what the point of it all was if the heroine was used, abused and... Well, let's not go there. But the point is - why did I just sink 20 hours into a story if none of it amounted to anything I wanted to see? All of the hardship, all of the torment, all of the pain, all of the effort, the emotions, the tribulations, and for what? So that Mia can hit the reset button and essentially yoink the entire game from under me. A sequel featuring the son could have set it all straight, rescued Naija, returned her memories and made all of those experiences and emotions mean something, but such doesn't exist and likely never will. So I return to the central question: Where were you going with this?
Yes, it's true that we can make our own sequels via mods, but there's a very serious problem with that: None of it is canon. And I don't say this to come off like a snob, but when everyone can make up anything he wishes and none of the details are ever set in stone, that just ends up taking so much out of the experience. A fan sequel is to an author sequel what talking about a movie on an Internet forum is to actually watching a sequel to the movie. When Half-Life was still young, I saw a zillion "sequels" to it, none official, none consistent with each other, none as good as the actual Half-Life 2, for example. What the actual author creates carries with it a kind of prestige that fan-made sequels can never have. That, and fans lack the amazing voice actress for Naija, not to mention that an actual sequel would need to involve new mechanics, as the To Be Continued screen suggests. Fan-made sequels are, at best, a "next best thing."
To end, I want to give a specific example of a series that manages to tie up all of its narrative, both the good and the bad and even the "reset button" mechanic, into a an ending so satisfying that I honestly don't want to see it continued past that point: the Prince of Persia trilogy Sands of Time -> Warrior Within -> The Two Thrones. The first game teaches us that one can simply undo his mistakes like none of it mattered, but even then the prince emerges wiser for his experiences and seeks to prevent the future that caused a disaster. The second game teaches us that we can't undo what we have done, and no matter how many times you reset time, something will go wrong, but in the end, the prince settles for the best possible outcome. The third game teaches us that you have to stop trying to fix your mistakes and instead accept the consequences of your actions, both bringing us full circle to the beginning AND finds a way to finally put its defining mechanic - time travel - to rest via character development. All plot threads are closed, all character traits explored, all villains defeated, and the timing and precision of the final few words simply make everything click into place. This is a story which becomes one seamless whole at the end, where every bit of it is necessary, both the good and the bad and even the horrible writing at times. Everything is necessary, everything has a point, everything serves a purpose, and everything works towards bringing a MASSIVE wave of closure right at the end. The actual story isn't all that amazing, but the way it ends makes up for any flaws it may have had, because even those flaws feel like they contributed.
I really, REALLY hate to be critical of Aquaria, especially about its writing. I love this game. It's one of my all-time favourites, and it's probably one of the best things I've paid money for in my life. However, after replaying it yet again, I'm still left with a mix of happiness and disappointment at that alternate ending. I'm sorry.