It looks like you've got some help with the background - how about some help with the sprites?
Some things I've noticed about these sprites:
-No defined shape. The Red Riding Hood and witch look the same, and if it weren't for the colour differences would basically be the same character. Giving a character a pose can help the player realise whether they're meant to be good or evil, etc. Here we have no facial expression, no physical traits... they're just representatives of a character as they are now.
-The colour scheme is far too saturated for your background.
-You've done them on a pink background - how are you going to tell how they look when you get them in the game, colour wise, unless you use a similar background colour to one in your backgrounds?
Here's my paintover. You've used a tiny, tiny resolution but I've tried to make it as detailed as I can get it. Linework included for reference:
Now, to be honest, I've changed a lot of things here, BUT, the new style of characters fits your background style so much better than the original. Check out this little comparison:
Anyway, I hope you get some tips from this little exercise of mine. Good luck with your project.