Hello!
Dont worry, english isn't also my first language, so I can understand the confusion. Thank you for asking more informations, i'm glad to help you.
Answer to Question 1: The point of this Jam is to be "near" as much as you can to MiSide (you can also ignore the original game eventually, if you want something more original). A dream figure is already plenty different from the original game, but feel free to get closer or distant to MiSide as you want, always keeping the theme in mind.
Answer to Question 2: You can surely change it, actually the thing of 1 day to stay with this figure was meant to not over-complicate the game. If you think you can do even more days, no problem in it.
If something is not clear or you have other questions, I'm always here to answer.
Thanks!