Oooooh, I loved it! 'o'
The battles are really well done! It gets a bit easy when you understand that it's about timing more than luck, but since it's inspired by Paper Mario (and it shows ^^), I'm guessing this might be intentionnal.
The Bad Luck mechanic is really interesting too: if you want more powerful hits, you have to let it accumulate, by by doing so you take much more damage. Risk, reward.
And finally, for the visuals, nothing to say: it looks great, the characters are adorable, and the little bow animation at the end of each battle is the cherry on top.
Only weird thing: [spoilers!] when meeting the human in the end, the music gets all gloomy/disturbing, so I was prepared for a boss battle, but nothing happened. (maybe he's just in his emo phase? °^°)
Excellent work, your submission is really great! =D