This image shows what pillowshading is, and why it doesn't look that good, better than I could explain:
It's not that having a lightsource in the middle is forbidden, it's just that usually it can make the sprite look weird and/or flat and/or unrealistic, whereas a lightsource from one of the top corners will give it more volume and life.
From what I've seen all your sprites are fully symmetrical, if I were you I would try to start also making sprites that aren't as much symmetrical, it's a good way to improve and evolve.
I think your new edit is definitely better than before, it looks like it's more roundish, plus the colors look "dreamy" hehe. If you edit it again please post the evolution here
One last thing, when you've spent hours on a sprite and don't know what to do anymore, don't look at it for a few hours or even a day, and come back to it later with a fresh set of eyes.