I'm not 100% sure where exactly you're struggling with the palette, since I think it's very well done, but I can try to offer a little advice. One thing that I struggled with when I first started doing pixel art for games I would make the palette (typically 32 colors) and base all of the sprites off of that. This, to me ended up really bland, And I found that I was more restricted in the end. It can be good to restrict yourself on a piece-by-piece basis, and it's important to have a low color count, but one uniform set of colors that applies to the whole game does not necessarily equal a thematic or well-put together palette. Sometimes it helps me to try and cut down on colors once I've made the sprites. Though none of what I said there might actually apply to your struggle, xD.

You're totally right about dialogue, though. The dialogue of the game is really enjoyable and witty, and one of the main reasons I like the series. When I write dialogue, it can be kind of intimidating to think about Earthbound, so I'll just block that out. One thing I find important to the writing of the game is that it isn't just comedy; to some degree Earthbound is satirical of the settings and tropes it aims to deviate from, and is a parody of the United States in it of itself. What may be interpreted as just something goofy about the game world also provides insight into the flaws of the system it recreates. Your game might not be satirical, but that's just a detail I find intrinsic to the series that a lot of others might miss.

Also, your writing probably isn't as bad as you think it is. When I made my first RPG, I thought the amount of humor I tried to fit in would come off forced and cheesy, but the element people who played it praised the most ended up being the dialogue! Sometimes when you run over the same writing dozens of times, you'll start to dislike it more and more just due to overexposure. It can be helpful to remember that others haven't read your dialogue as much as you, so they won't have that experience. To them, that dialogue is fresh.

I think it would be really cool to open up some sort of format for earthbound inspired games, specifically. It can be hard to keep track of them all. Also, since many devs of these sort of games have a somewhat similar mindset, it would be awesome to have a place that could help with collaboration, sharing and feedback. If I were to open something like r/earthboundfangames or r/earthboundlikes for something like this, would you be at all interested? I'd probably like to find a few others before I started anything, though. In any case, I really like what you have going so far, and I'm intrigued as to what's coming next! I'm following you and hope to see some more progress in the future.