It's so cute! As always, you manage to make it sound perfectly like "rat", "student" and "magic". The instruments, chord progressions, and melody all fits so well.
I interpreted the 'challenge of reduction' as using 3 instruments in total, not at any one time, but that makes a lot more sense! It gives much more room for creativity, and I am impressed to hear (and see!) the result. Looking at your DAW screenshot, you really did your best: a lot of quickly alternating instruments, and using the reverb to still get more than 3 instruments sounding at once (but still only 3 playing at once!). Really creative and good use of this limitation. And given your love for a large number of instruments, this must have been a very interesting and challenging song to make!
0:23 to 0:28 is really an interesting progression, really fitting a magical student vibe - it almost sounds straight outta Harry Potter or something. The harp, violin, and flutes really make this song fit so well. I've read your 'correlation to theme' and am now really curious what you did with all these progressions - all these "borrowed chords" and "Mixolydian flavors". I would never have guessed to use such things!
In short, a classical Blue Lava masterpiece! I'm glad these jams gave me the opportunity to hear some amazing composers at work again, definitely including you. I can't wait until the next time I'll see you again!
PS: Where's my mp3, I need to put this in my iTunes ;)