Alright, it's been a while but I finally have a progress update on this project!

Grasstown is done (and has been done for a few months, actually) and Sand Zone is being worked on! This area took way too long to finish due to personal life stuff and the density of complicated sprites throughout, but it's finally done and I'm glad that I don't have to draw any more jellyfish. I'm only uploading this image for now since I would like to have Sand Zone at least partially completed before showing off more. Once I've gotten more done I'll put out a showcase video with both areas in it.
Also, sorry for forgetting to respond to the feedback from when I made the water post. So here's that:
that looks pretty nice! i'd make it a little lighter (or at least play around with the saturation/hue a little?)
The switch port's decision to make the water more visually distinct from the water was a smart move but I think the water shade should just be taken on an area by area basis based on what the backgrounds the tilesets are paired with should look like.
The way that I made the water effect actually means that I can easily make these adjustments for each tile set! The water's color is actually just part of the sprite sheet as flat, transparent blocks of color, whereas the part that actually moves is just a scrolling texture put underneath the water tiles.
Hopefully it won't affect certain areas, making it harder to look out for obstacles or worse, harder to no-hit Ironhead. *cough* Cave Story 3D *cough*
and yeah, it'll need to be playtested in waterway/ironhead's fight, interested to see how it'll look there
While the Waterway area itself will use the water effect that I've shown off, the Ironhead fight will actually need a unique effect programmed specifically for it. There aren't any water tiles in that fight, so if I loaded it right now it would look pretty close to normal. But yeah, I'll try to keep visibility in mind as much as possible since Waterway doesn't need to be more annoying than it already is.
If there's anything that might need adjusting in the style thus far it'd be the consistency of when you do and don't use the blurring, it's a bit all over the place here and in most anime backgrounds, etc. You're expected to do oil paints and gouache paints.
You also need to emulate the effects of ambient occlusion to properly sell the effect of depth at this high of a resolution.
I think I understand the 'blurring' consistency problem, you're mentioning here? You're talking about how some things use simple/cell shading whereas others are more airbrushed, right? If you are then yeah I definitely agree with that. The unfortunate consequence of this project being used for me to learn art means that a lot of sprites (especially earlier ones) don't use consistent techniques, and so the style sometimes fluctuates... My plan is to do a final 'art pass' once I've finished most of the game's sprites, and hopefully through that process I will be able to fix stuff like that. The only thing I can't address here is the ambient occlusion thing, since the way Cave Story uses tile sets doesn't make this possible without making entirely new sprite sheets and editing each map.
Anyways, I'll try not to take several years to between updates next time.