Yeah, it does smell a bit Yoshi's Island.
In the scene itself, the boy looks awefully small compared to the balloon.
He looks sorta like a dwarf-thing, maybe make him twice as size, since I'm thinking his size in-game is what his size is now.
Three shades, even with dithering, might not be enough for that big balloon. Maybe another shade or two, possibly borrowed from the background if color count is an issue, could add to the depth.
Another thing you could add are flags or things that could flap in the wind - you could place them on the balloon itself or on the box thing, you know, to show movement.