Texture tiling is fine as it's common in most PS1 game, I'm ok you using multiple textures, as long as each one is 256px or below, since the PS1's limit to textures is 256px. A long of PS1 games have it to where even though the texture are only 256 x 256, it has a ton of detail. Any kind of texture filtering is allowed and there are no color pallette limitations aside from the fact that PS1's can only render 256 unique colors on the screen at one time, and don't worry about graphic looking out of place since the maximum game resolution is also 256px by 256px so in the end none of the textures will really be too detailed. Hope this answers your questions 🙂
I'm sorry for being a burden to answer questions for, but I noticed that although the rules say that a specific resolution of 256x240 pixels is required, the PS1 was still capable of higher resolutions than 256x240 (ranging from 256x224 to 640x480, at least according to Wikipedia). Is this intentional?