Hello!
Thank you for a detailed report.
It seems the game cannot create a temp folder (in your %Temp% system location) as the .NET Framework responding with the error "The file or directory is corrupted and unreadable."
The game is trying to create a subfolder "%Temp%\AtomicTorchStudio\CryoFall_v0.23.8".
Please check the %Temp% location and ensure it's fine.
Running "chkdsk /f" might help to check and fix this drive.
If nothing helps, please ensure the game is not sandboxed by an antivirus software. Lately even Windows Defender (in Windows 10 build 1911) sometimes sandboxing the game preventing it from accessing certain folders (though usually, it's related to "Documents/AtomicTorch/CryoFall" folder).
Regards!