Machines have an arrow that point in the direction that they output.
Machines can only output onto a belt (can't output from machine to machine).
You can build while items are coming in! While items are flowing, your range is restricted to near the couch (within 3 tiles).
And yes, the level 2 time is very short! That was done intentionally with the thought that it would force players to learn that they could do stuff while the factory was running!
I should probably get a screenshot of what a working level 2 solution looks like and add it to the game's screenshots to give players a hint.. That seems like a good idea.
Thanks for the praise! It was a pretty hectic week! We have 2 programmers on this team and both of us worked for around 15+ hours a day to get all the functionality in! Pretty proud of it!