As far as the horror aspect goes, the only part that is at all scary is the opening cutscene which has creepy jump-scare images flash in front of the screen every few seconds. The actual game isn't particularly scary thanks to the predictable, slow moving, and sparingly animated monsters. Still, while Innsmouth lacks scares, it's surprisingly fun to play.
The game consists of exploring mazes of hallways and doors in search of a key which opens that level's exit, all within the time limit. The mazes also have monsters which can block your path and attack you, like I said before, very predictably and slowly. These monsters can be defeated by shooting them repeatedly, but doing that takes up time and precious ammunition, so it's usually a better idea to run away and find another path around the monsters. It's also worth mentioning, that aiming with the Virtual Boy's second D-Pad is kind of awkward and certainly not the ideal first person shooter experience. Even if you do kill the monsters, they respawn after a short time, although that's not too big of a deal since you probably won't be backtracking through areas you've already explored anyway.
In addition to keys and monsters, each level also has a limited number of ammo refills hidden in plain sight, extra health, and two different orbs which can help direct you. These orbs act like the map and compass from The Legend of Zelda series, with one giving you a map of the current maze and the other showing item locations on the map. If you don't have the map-revealing orb, the map will fill in as you explore it. All of these items are placed randomly in each maze, so much of the fun comes from exploring without knowing where you'll find everything. The map also comes in handy because, unfortunately, pretty much everything and every place looks the same. I'm sure the Virtual Boy gives some cool depth to the visuals, but the repetitiveness of the graphics and limited animations of the enemies are pretty underwhelming. The music, similarly, is nothing memorable, but it does set the mood well enough.
Even though Innsmouth Mansion is technically a first person shooter, it doesn't have the range of motion and control that you might expect if you're accustomed to modern FPS games. Instead, you move through the grid-based maze one "square" at a time, instantly advancing to the next or previous space when you move forward or back, or by making abrupt 90-degree turns. The only aiming you do is done by moving a cursor on the screen. However, the speed at which you can race down the hallways and switch back and forth from the map screen is gloriously lag free and fast. This speed of movement is great because the game encourages you to go fast, not just with the time limit, but with branching paths of levels determined by how quickly you finish each maze. All these branching levels end with one of four different endings, the best of which requires you to move quickly and also beat the game without dying. If you do die, it's not that big of a deal because there is a password system in place with short, easy to remember passwords for each level. As long as you don't reset the console, you won't even have to type in the password to continue from where you died.
I'm currently embarking on a quest to beat every Virtual Boy game! You can watch me play live on Twitch or catch each game after the fact on Youtube.