Q. are assets allowed?
Yes, whatever you can use to get to your main idea. But please honor whatever terms-of-use agreements the asset-creators have requested, whether it's mentioning them in the credits, cross-promoting their work, etc. See this link for guidance.
Q. if so, are we allowed to make them for our games?
You can do whatever you want with assets you've made for the jam, but if you're working with a team, make sure everyone on the team is on the same page with how you intend to use the assets after the jam is over.
Q. Is just me or is this a great jam idea???
I look forward to see where you take it!