Depending on the fiction, looks like this might be a bad guy? Seems like he's controlling the freaky tapeworm walker thing.
I like the textures on the fleshy landscape/monster! The wrinkles, folds, and holes are great.
As far as shading, it seems like you know what you're doing - looks like a mixed gradient/cel shading, and you've got an idea of where to take it. I agree on the foreground arm, if it's as far forward as you say it is.
I feel like background/skybox are just vague enough to fit the fleshy setting, since the major focus is on the characters, and the monster seems to extend enough into the background to give some feeling of distance.
Your other concern on color could be explained through this landscape anyways - it seems like that ecosystem's colors would fit with the light red of that fleshy ground.