Played your demo, must say I enjoyed it. Criticisms:
:: Do something about those trees, the put everything off balance, in scale (change them back to normal size).
:: Gather more sounds for you characters, especially your guide... it gets tiring hearing the same sounds all over again.
:: Zelda sounds a bit spoilt (not sure if its intentional or not)
:: I really like your npc designs.. however link and a few other npc look paper thin when facing up or down. (They dont match the perspective, you should be able to see the top of the top of there heads, links hat should definitely be rounded)
Blue background is the original sprite, red is the edited one
:: Link looks apsolutly weird from the side, well he looks like Hermes or a blond kid icarus (without the wings on his back)
:: Those balloons should definitely go pop when you swing your sword at them
:: The festival fireworks should stop after Zelda gets kidnapped. Its just seems out of place that they just continue, and why doesnt anyone care for her?
:: Whats up with all those chests in peoples homes?
I hope Im helping out. :-)