Hello, thank you for playing. You're not doing something wrong; the quest system isn't finished yet. I still need to create the logic for completed quests and awarding rewards. Thank you so much for giving feedback.
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Yay! And that's ok, the cool thing is you have quests that react to picking up things. I would say at this stage awarding rewards isn't a mandatory but nice to have, where as if you had quest completion and some quest dialogue for each item then you'd have a complete "game jam" game. Good job though, can't wait to see you flesh out the questline + dialogue ^.^ it's super cute!