Although I would prefer if the lil caterpillar was a little less floaty, in general, I really enjoyed playing the demo! It gave me heavy Castle/Land of Illusion vibes.
The tilesets are really cute and somewhat original. Also, I did not expect the lil fellow to get Super Mario-like power ups. I hope you finish this someday!
As someone who also works with GBStudio, I cannot help but wonder how you made the spider/thwomp enemies without lagging the game.