This is absolutely amazing. The art and the sound are really nice and charming, and the concept is phenomenal. I think that if time permits you could've added a tutorial level, a "dictionary", and maybe some more words/items that use the letters that you give the player. I also think there should be a shortcut to clear the current item's letters, because it wasn't immediately obvious how to destroy and recreate the boxes, for example.
Otherwise, absolutely amazing entry to the jam, I had a blast.