I have been brainstorming and spitballing ideas for a rules-light side project for a few weeks now and have got a very rough draft. Is it okay if I use this as the basis for my submission?

It says to do most of the work during the jam period. I would think that's perfectly fine.

Yes, as FrankSilantro has mentioned this is indeed acceptable, so long as most of the work is done in the jam period.