As a Wild Mass Guessing subpage, all spoilers are unmarked as per policy. You Have Been Warned.
The inhabitable planets and stars aren't what disappeared. The colonies and space stations were sent to another dimension by the Quiet Rapture, and the dimension they were sent to is in fact,
HellAs for the ghostlight of the stars, they were merely an after-effect of the teleportation, with the oceans of blood belonging to sinful people.
The sea monster wasn't attacking you in the ending
It was trying to save you. After being spooked by your photography, the frog/whale
following the player accidentally damaged the Iron Lung's hull. As blood pours in, the convict is going to drown, or get crushed by decompression. The monster bursts in to rescue the convict from certain death, but now stuck
in the frog/whale's stomach, finds they are still no closer to freedom.
The weird distortion anomaly did the Quiet Rapture and created the Blood Ocean
Why? Why, to lure people to be killed so it could, I dunno harvest their souls. Like a predator that pretends to be an inanimate object. Only this one slowly feeds on civilizations.
The “survivors” of the Quiet Rapture are actually dead and in Purgatory, but don’t know it.
There is really no probability for why stars and inhabitable planets would just disappear. It’s pretty telling that the only known people alive are people who were on space stations. What may be actually happening is that the “survivors” themselves are all dead. The reason the stars and inhabitable planets are unseen to them is because they’re dead, and their souls have passed into Purgatory. But they don’t realize that they’re dead and in Purgatory, and thus are trying in their minds to secure the survival of humanity.
So what is the blood ocean? Well, Purgatory is traditionally considered a place of “cleansing” for a soul. According to the Iron Lung wiki page, four moons have blood oceans. In-game, it is at the fourth point of interest where you first see the monster’s face. Four is the number of death in some cultures, one of which being China. It’s even a trope on this website, Four Is Death. But the number four has a lot of significance biblically. It is considered a number of completion. As an example, God finished the Earth, the Moon, and the Sun on the Fourth Day in the Old Testament. So if the world the “survivors” exist in is Purgatory, these four oceans are harbingers of death. But if this Purgatory, and the number four is “completion”, then that means that entering these oceans completes your Purgatory.
But given that four is also seen as a number of death, “completing” your Purgatory in one of the blood oceans sends your soul to Hell.
Where did the stars go? They were imploded, every single habitable world shattered and cast into the Shroud. While there's no mention of sentient aliens, there's no mention that there aren't sentient aliens that maybe humanity never got to meet and never will, for they have already condemned the galaxy for their on purposes.
