The information for this jam states that pixel/voxel art is preferred, does that mean the entire game should be in 2D using pixel art? Or can we use 3D assets and utilize  pixel/voxel art for the cabinet/background?

Hi Brooks! It is totally fine to give yourself a certain degree of creative freedom. So the answer would be yes, you can use 3D assets. Be mindful of eventual performance issues, this is supposed to be a WebGL game after all 😉
Also, please refer to the Judging Criteria section on the jam page.