Hi tobiasvl! n.n
To my knowledge there is nothing Squidlit does that a Game Boy can't do. However here's some of the tricks that push the boundaries:
There are a couple of points in Squidlit that a Game Boy would probably have a framerate drop. To compensate for this, Squidlit is capped at 30 FPS (as opposed to the Game Boy's ability to peak at 60 FPS)
Most Game Boy games flicker between sprites when they display more than 10 sprites in a horizontal line. Squidlit doesn't have sprite flicker because it never has more than 10 sprites in a horizontal line.
The boss fight with the Sharkerfly would occasionally pass this sprites-per-line limit, so the sharkerfly is instead made of background tiles, with its open mouth being the only sprite. That's why there are no clouds behind the sharkerfly, because they would scroll up and down with it.
When Skwit Skwot (the moth creature in the final screenshot) is doing her "God Emperor!" pose, if all of her sprites have the same color pallet, it would pass the 4 color per sprite limit (which includes transparency) because of her darker wings. Skwit Skwot's eyes are counted as a separate sprite to overcome this limitation (Mega Man's NES sprites do the same thing).
Some of the levels are bigger than the Game Boy's default level limits but there are tricks to get around this, like deleting parts of the level behind you to load parts of the level in front of you.
Squidlit would probably have to be on one of the more spacious Game Boy carts.
Squidlit doesn't do the "ghosting" of the original Game Boy screen because it would need to be in a resolution impossible for the Game Boy to make a similar looking effect. (Hmmm, I wonder if you played it on a really shoddy LCD laptop screen...)
If you spot Squidlit doing something a Game Boy can't please let me know so I can put out a patch!
As to why Squidlit isn't on actual Game Boy hardware, first of all, I don't know Game Boy assembly (But would be VERY interested to learn) and since this is my very first game, I wanted to keep things simple to learn. Also I think it would have made it less accessible. Producing actual carts would have cost more money than I could afford and would have driven the price up higher than many gamers could pay. Perhaps making a rom would have been cost effective?
Thanks for your questions! Have a Squidlity day! C:3
~Alex Barrett