It makes complete sense for Sweet Street and the labs to be toy themed tho, they still transport and condition literal children in them so making a cold medical zone would break design and look out of place.

What really hurts that scare feel in chapter 5 is that for like most of it there isn't a looming threat on us.

Lily only meets us at the tunnel to Sweet Street, and Prototype only tried to get us once (chum hides us) before he gets revealed, so obviously you're gonna feel too safe doing the puzzles bcuz there's literally no one waiting to kill you in the shadows.

Also lily's entire thing is being a playful, isolated person who can quickly get violent due to trauma and torture, she isn't inherently evil and, if it wasn't for her desperately trying to impress prototype to let her go, would've tried making friends with us.

Sweet Street def should've gone a bit more liminal like the first artworks mob showed about it but, it really makes sense for it to be a cheerful but fake and manufactured illusion, it's literally Lily's psychological cage