Outward meets this pretty well. It might not be quite storybook but it’s far from grimdark. Soulslike, full coop - definitely has the “might not make it back from a dangerous dungeon”. Only thing you might not like is some light survival mechanics (ie food and water).

Makes me think of Shenmue but with different theming.

IMO, no. There are a billion good places to eat while in the UK but I don’t think Nando’s is one of them.