I was very intrigued by this entry because it used the theme in a very original way. The battle system is based on the one used in undertale and I think it was a really good choice as it gave more characterization to the cast. The fact that these battles occur during sleep also makes us understand how the protagonist is tormented by his past. Maybe I would have reduced the HP of the enemies a little and I would have added a quick tutorial on how to understand which is the most appropriate attack to do (in a nutshell use interact before acting)!
I read that in your idea there was going to be another boss fight and in my opinion it would have been perfect to have it as a conclusion! I don't know if you intended to expand this game in future or if you wanted to create a stand-alone game for this jam, in any case you did a good job, keep it up!