"Key" is a bit over-rated when you're talking about chords/progression. "Key" is mostly about scales.

"Is this something I can continue with (creating chords by ear), or I am going to run into problems." Ultimately, even with a knowledge of diatonic chord theory, you are creating chords by ear. What sounds good? What creates the mood and movement you want? Knowing the diatonic chords in a key is a great baseline. But there are so many variations available beyond those basic 7 chords that are equally "musical" and ultimately maybe even more interesting for a particular song. Definitely trust your ears.

BIAB 2021 Audiophile. Windows 10 64bit. Songwriter, lyricist, composer(?) loving all styles. Some pre-BIAB music from Farfetched Tangmo Band's first CD. https://alonetone.com/tangmo/playlists/close-to-the-ground