is cheaper filming in Oz?
It's cheaper than filming it in the UK or US. They also have a favourable exchange rate and Ridley got a good tax rebate and incentive deal from the Australian government.
Hopefully the success of the Martian will allow for a higher budget.
Shouldn't really affect it either way. The hard R-rating will be the main determining factor. Ridley's highest budget film (unadjusted) was $200 million for Robin Hood which he got right after Body of Lies' dismal box office.
It's still under construction. There's time for them to sculpt it.
It's already very similar in style to what we've seen in Prometheus. We're probably just deluding ourselves if we think that's it's still going to change to such a large degree.
A pity because the biomechanical look in Alien was very unique and distinctive. It's a real waste not exploring that particular look any further.