Welcome to SMWC, and props to you for putting forth your first level as a contest entry! It's a great time for feedback. Also a confident move. Hope you stick around.
The time up screen alteration caught me off guard and I laughed. I admit I abandoned Yoshi in one part, so I didn't eat up. Once I got the swing of it, the level really does have a great forward-momentum like Yoshi's Island 3 with more Chocolate Island-esque design. The second half of it is a very steep curveball, as you have to abandon Yoshi and climb up to bait this disco shell over to a block. What's cool about that is you're sitting on the time you've gathered so far and you get no more perks as you try to open that P-switch box. I think you provided just enough time for the player to finish. The last berry may have even been a bit generous since you're about 2 seconds from the goal if you hold left.
For me, the challenge is fine. It is easy-moderate but doesn't forgive damage. It is imperative to not let Yoshi die - at times he is easy to catch and others he is a certain loss if you take a hit, and I respect that. The level does have a few safety nets if you're still mounted but fall. As for length, it's about 2 minutes once mastered. This makes having to start over not be a pain. It is balanced in that regard, but that length tends to work better in context of a multi-level ROM hack.
However, "interesting-ness" I'm not sure about. It is quirky in how it looks, its story, and its humor, but the level itself doesn't really have anything that jumps out to me as-is. I think it could use some refinement (shed what the player hardly, if ever, interacts with, possibly reassess areas that have slopes for having slopes as fun as slopes are since those areas are a bit empty) and if the level is extended beyond the first pipe, a midway point would be a good add. I think where you've ended your level in a lengthy abandonment of Yoshi that has Mario do something Yoshi can't, only to return to Yoshi with an essential piece, you could create a second contraption around that idea to keep the level 'unified' conceptually but make it more complex and don't just reuse the idea of leading the shell to the box: Mario's small form might provide you with an idea, or sneaking underneath where Yoshi's parked to kick up a few items he needs to progress. There's definitely more you can imagine for the "teamwork" concept, and I feel like the level really needs that extra bit to really be memorable and interesting.
There are two design caveats: the bottom tile of the Lunar Magic level editor will not appear in the emulator except for the top row of pixels. This can make ground hard to tell apart from a pitfall and vice-versa. There are a couple of areas you have, such as the exit and one slope area, that have ground here. The other is silent Bullet Bills - you'll have to have them spawn from the generator to create the sound that alerts the player they're coming. While it doesn't affect this particular level because it's so low it's going to be a death anyways, there is also the use of walls you can move through that border the lava as opposed to solid walls, and this can be funky in other setups, such as being able to sneak through and land on something in a scenario that logically appears like it's going to be a death.
There are also some very smart things you did, such as using coins to suggest a safe long-distance drop, and I do admire the way you could look at different objects and the extended relationship between them to make the puzzle in the second half of your level: it's an important observational skill to have and with that you can get very creative.
The palette work on the background is quite good for a first level. The purple and light slate does give it a bit of a surreal look. As stated before, I do like the humor. I think use of time extension is underrated and underexplored as a gimmick. Your level does it better than Funky did. I like the checkpoint-style layout of them. There are some odd parts that could be expressed in a cleaner manner utilizing other tiles in SMW, such as the trees you built with a partial outline and used blocks that look very much solid while being walk-through.
There's still plenty of time to play with additional graphics files in the Map16 editor to create new props and cooler trees too, and I can see from your use of the clouds and bridge tiles that you're already at least familiar with how those edits work. Don't forget to post your patch in the submissions thread at the top of the forum when you're done so it'll be judged!
Just look above you...
If it's something that can be stopped, then just try to stop it!