I guessed from first sight it was insppired by Denmark because of house designs.
I am not quite agree that its terrain is dirt with lush hummocks. I think it's rather lush with some dirt.
And I think you missed I think the most remarkable feature of Denmark which are streams and waterfalls. I guess just one lot with beatifully terrained pool tool cascades could spice up your neighborhood and make it more native and unique.

Yes, it's dirt terrain, I thought when I did it with the grass terrain that it looked too green.

Thanks for the idea, streams and waterfalls aren't that easy to do in Sims 2 without CC. I do have a lot with a hot spring though. I'll give it a think, although I wanted this island to be harsh and somewhat inhospitable, rather than a lush paradise.

Aaaaaaaa. I seeeee. I judge just by pictures found in the net. Have never been in Iceland. It looks green and windy on pictures.

It was inspired by images I found of the faroe islands, but it's not meant to be the faroe islands! Rather my own created island (and I often make bleak and depressing places).
I'm going to see if I can get some inspiration of how to make a nice waterfall though.

What I like most about gloomy and depressing places is that you can find comfort in a shelter or things like that xD I don't know if I'm explaining myself correctly. Those little houses activate that part of me. While the place looks like this, it is an island, so it is protected. hahahaha weird psychology. I guess that's why I almost always put fences around my houses. XD
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Although the idea of putting something more "emblematic" like a waterfall or something that stands out is a good idea to attract more audiences! Also fun to bring your sims to the place.
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Hygge!

Yes, I do see what you and Vic mean. But how to build a waterfall in a vanilla game? I don't see how I can do this with the pond mechanics working as they do. You can't join water on different elecations together by a channel (stream) as this changes the elevation of the water level.

Edit: Here's my hot spring lot, it's a bit underwhelming and pathetic like the rest of the island (not really a place that people would travel to see, hence the lack of tourism on the island and self-sufficiency out of necessity). It has a hot house (sauna).

As it's not really possible to create a proper waterfall, I just used a fountain and some greenery to create illusion of a trickle of water.

I see, maybe it would be better to continue with the desolate concept, think of things that have to do with the island, maybe a hole or holes or something like a ditch, play more with the land tool. Maybe more than one thermal bath, like 2 or 3.

But I say this in case you want to improve that particular lot. The island seems cool and coherent in its concept to me.

Edit:Seeing the place again I really don't feel like it's missing so much, I know you don't want to overload it with rocks and vegetation, maybe make the "waterfall" a little higher or add some rocks or a little more vegetation. But I don't want it to break with the other lots in excess, so I just ramble. Take my words as rambling and do what you want!! XD

I like those lot you just created. I thought you might have use swimming pool tool but you used natural water tool which came up even better.
This looks really great. Thank you.

@Victor_tor That lot was already there, it's one of the first I created! That's how it's always been. I thought you were meaning that this was not enough and I should make a better one, and I was asking how? But if that one is okay, then good enough! This was why I was asking people to play test rather than comment on the images I've posted so far.

I think the neighborhood is perfect. As for the green color, in the north, there isn't so much of it. It's more a darker brouwn - On Iceland for example the highest temperatures in summer are about 12 to15 degrees( Celsius). The atmosphere you show fits perfectly.
By the way, the neighborhood works fine.

Thank you very much @abc_ente That's very helpful, glad to know you found no errors! The images I was inspired by were these attached, although of course there is much more to the Faroe Islands than that!

Oh dear. My mistake. Just downloaded it. Thank you for push my back to this action 'cause my brains are somehow slow for this.
Soo. I found those lot you mentioned. Aand... it is quite something as I expected.
What also I have to say.
Names in half of households are random.
But the rest works fine.

Ooh, are they? Could you give me an example of which household is broken please? I'm sure I set to default string, but maybe I missed some. Thank you for your help!

Oh really? Sims from just two households have their proper names. Guzeg, Ronha, Arcos, Male friends, Lhast, Whelie, Female friends and the cat from Midgaff household - all their names are random and signed in my native language.

Thank you- I found it! I missed some in the catalog descriptions. Thank you for finding this, will fix it! Much appreciated, you have eagle eyes!

I'm going to try it in a while when I get back from doing some shopping. I haven't done it yet because I have to create another EA Games folder so that the new carrer doesn't interfere with my saves. The few times I've been to the sims this month have been to take photos. But in a couple of hours I'll try it!