Nice prototype. Not much graphics yet, but what you have are good.
Looks like you can walk on the water right now. Don't know if you just have not blocked it yet or you're planning to set it so that part of the player is submerged while wading. Some other interesting things you could do with the water is have the hero able to walk on it when in the spirit world, or set up some spirit world portals that transfer you between islands.