The "big" yellow square on the deer's head somewhat looks like a cyclop eye. Is that intentional ?
I can't get myself to interpret it that way, but I can try to change the shape of the bright spot and see if that helps.
Having a second frame where you see its mouth open could help. Having him displayed on the title screen (like in your cavern-adventure project) could help as well.
Not a bad idea. I could have a relaxed frame for each sprite and an alert frame or something like that. I'll also have larger creature portraits in the game, so you will get to see them up close.
I should probably explain a bit more about the gameplay. It looks RPG-like, but it is a puzzle game. Instead of battles, you have animal tests where you test potions to see what they do.
I won't be working on the more GUI-heavy screens until I'm closer to finishing my prototype and know what I need, but here's a rough mockup of a "battle screen", just to give you some idea of what it involves. The important elements on this screen will be potions (type, level and target), a target creature (health and level), your current reputation and the resulting change in reputation.
The creatures won't attack the player, so player health is not important here. The only thing you have to worry about is reputation. For instance, monsters don't exist naturally. They're created by you. If you leave monsters out in the woods, it's going to have a negative impact on your reputation.
I want to at least try to stick to the tile limit, but it's going to be tricky without an easy way to check the amount of tiles without counting color swaps. The large animal portraits will have to be smaller, probably. I'll try to reuse tiles as much as I can, but I'm probably not going to use a hard limit.