Just some general feedback on aesthetics. I know you are set on the day/night cycle.
The lighting is harsh during the day as in too bright / washed out and the shadows/unlit objects are completely blacked out.
The color saturation of the sun light actor is a touch too yellow and gives everything a yellow cast when its at its peak. Maybe pick a lighter hue or reduce the saturation level.
The nighttime lighting with the lamps looks a lot better than the lighting during the day and provides a lot more atmosphere. Especially with the thunderstorm. Great job on that.
EDIT:
I found a decent page covering some of the various level lighting configuration settings. It looks like a lot of it is handled in the worldinfo actor under lightmass. It is controlled by enabling global illumination.
(This is to help the lighting bounce better and provide more ambient lighting to the harsh shadowed areas. )
From there you have control using these variables:
Num indirect lighting - Increase this to control the amount of times the light bounces / bounces off geometry. This will help take some of the harshness off shadows.
Environment intensity - Controls the overall lightness of the scene. The higher / lower the number the more it brightens / darkens the overall scene.
Shadow Exponent - Controls the gradient fall off of the shadows. Will help smooth / roughen up the shadows.
Diffuse Boost - Works in some ways similar to Num indirect lighting. It controls how much the light diffuses off objects / materials in your scene. This can help bounce the lighting more believably as well.
http://www.chrisalbeluhn.com/UDK_Lightmass_Tutorial.html