First of all- graphics style war really cool. Flat shading with vibrant colors worked really nice.
Same goes for the use of the theme. The "one room" makes sense as a setting, and it affects the gameplay in the meaningful way. Also- the plot hit me just the right way- when you have kids, protecting them from nightmares is what you want to do!
As for the gameplay itself. What's there works fine, but I'd really like to see more. More plushies, different bad dreams, more gameplay variety over all.
You can really see the polish in the game, but a bit more variety would elevate it a lot!