Feedback loop essentially means "input -> output -> input -> output"?

Like lets say you finish a level, you get rewards and those rewards help you in future levels. Is this an example of a feedback loop?

It definitely can be! Other things like chain reactions, or doing one thing that closes off the ability to do another thing, could be a mechanical way to interpret the theme.

But don't feel like you have to restrict yourself to just thinking you have to operate within the mechanics of feedback loops. You can always separate the words 'feedback' and 'loop' and explore any ideas that fit those two words independently.