Glad that the game brought to mind Zelda 2, as that was one of the major influences. The end objective with that towns is to do something similar to how Shantae's towns are on the GBC, though it is currently just a basic version to figure out how to get it working with GB Studio.
Oh geez, I'm terribly sorry about the issue you ran into in the desert dungeon. That is the correct room for the Fragment of Fire, but I just took a look at the project and it looks like I messed up the flag check on it. There is code that makes the Fragments not appear when you've already collected them, but I apparently put the wrong flag on the Fire check, so it's currently checking for if you've collected the Fragment of Air =___=
Thank you for letting me know about this bug. I've updated it in my project and added a warning to the game page, but I don't think I can update the jam version to fix it here. On the bright side, you basically made it to the end of this version, as that next upgrade is the last part I was able to add in time (and there's no where really to use it yet).
Thank you very much for taking the time to give the game a play! And sorry again for the game-breaking bug that you ran into