The art style seems really at odds with the theme of the game, overall it's very quirky and vibrant, while with the story of the 'no fun allowed' spell having been cast over the entire island I'd expect much more regimented structure and drab colours. At least until Elana has freed/corrupted the place, but I'd assume the art you're making now is for the start of the game.
I could say that this is what everything looks like before of the spell and just stay the same (wich in fact is, following the story), but the real reason is because it was easier to me draw it like and I actually like it. The story will quickly advanceto the point were people start to be more happy. But I can see your point, and I like it. Maybe we'll make a more grey view for everything when we have the game more advanced.