Sprites remind me of the Game Boy Advance and Pokémon, which brings back a lot of nostalgia for me.
I can’t comment on the sound right now, as my speakers are turned off.
I like the concept of the game.
However, it definitely needs some tender loving care. The user interface is almost nonexistent. You mentioned that being touched by NPCs will cause damage, but there is no visual indication of health at all. A progress bar or some sort of visual indicator would have been great. I would also suggest panning the camera back a bit so players can see NPCs approaching. Otherwise, getting hit seems more like luck than skill.
Overall, this is a good job for a first game jam! Keep it up!