Thanks for trying it out! Sorry you didn't understand it, faulty instructions on my part, I updated the games page accordingly.
As for your questions: The color blobs are trees, they don't really do anything. When you see the yellow dots go through the logs, they are adjusting their position so that they aren't stuck in it, or maybe it's a bug. Your character is the green dot, at the start of the game you need to place it somewhere on the map, do this by moving your mouse then clicking to place.
Hope this clears things up!
P.S., I LOVE the art for your game, keep up the good work!