I was just wanting to know if any art I have created would be allowed for this jam? Is that considered as 'models' in rule 1, or as the assets that must be made during the jam?

I use the term art as character art and scenery, is this allowed?

Models are considered as 3D base assets, so not any art can be accepted. You're free to make concept art but your assets shouldn't be in a completed state before the start of the jam.