Log?

It would be cool if Hazel kept a simple log of all the files it's affected. Maybe this exists but is hidden in the depths of my system folders.

You can get all that now using Console.app. Use the search field to filter out all the noise (like type in the name of the file you are looking for or you can filter on 'hazelfolderwatch' which is the background process).

Support for Growl is slated for 1.2. It will allow you to configure alerts of Hazel events as they happen.