What does the "Well" quality actually do?

Does it matter which level it is at when you get St Gawain’s Candle, or is it simply a progression marker?

Well is just a progression tracker. It does track your decisions at a couple points, which determines what options you’re offered a little later (with no mechanical difference), but once you’re no longer South it doesn’t matter.
edited by Optimatum on 1/7/2018

It’s also one of the best puns in the game.