Cool concept, reminds me a bit of Reddit’s r/place April Fool’s event. I don’t think I have a compatible device to try it out but consider making it possible if it isn’t already to put the palette on the side or bottom instead of the top (customizable UI).
Assuming there is no way to edit more than one pixel at a time, also consider allowing the host of a canvas options to allow methods of drawing with a MSPaint-like pencil or rectangle filling small areas. I can understand not allowing those features by default since it’s easy to vandalize.