The level looks pretty good from what I've played. The idea of using the switch blocks to change the pathing of the level is certainly a creative idea, and you combine the otherwise bland factory tileset (in my opinion at least) with your cave tiles to create a more engaging atmosphere. Design-wise, it's mostly solid. There are, however, some flaws you might want to look into.
The first thing I noticed were the trash blocks. Nothing tells me that I can "dig" them up with Y. I looked into Lunar Magic later on and noticed you had a message box text explaining this, but it was nowhere to be found in your level.
In addition to feathers, I can keep going through that pipe to infinitely farm 1UPs from the invisible 1UP block in there. Maybe you should make an ON/OFF switch required to leave this room?
EDIT: I just noticed there's also some cutoff above that red pipe in the second screenshot.
Inconsistency: The oil here killed me the moment I touched it.
Don't you think it's a little cheap that getting this SMWC coin means having to run another loop around this sublevel? It doesn't matter that I end up going down the other path as a result of the forced ON/OFF switch, you're still punishing the player with having to go through obstacles again once they get the coin.
Without the Yellow Switch, this jump was quite tricky to make as Small Mario. It would probably be much worse if I was big.
Understand that if Big Mario must crouch-jump to clear a gap, it's considered to be Big Mario discrimination.
Unless I'm forgetting something here, I cannot reach this ON/OFF switch, so I'm stuck. Don't tell me I was supposed to use the Goomba; a lot of players would've probably crushed it before jumping down.
This is a blind drop that has a couple enemies below. I'd suggest moving a Green Parakoopa below this spot so the player knows what they're falling into, or just closing the distance between this ledge and the floor.
I think it'd be better just to have nothing below those Parakoopas instead of this, as it's pretty obvious by this point in the game that players should be using those Parakoopas to hop across ravines when they can't see the ground below.
This jump is pretty much a forced hurt if I'm Big Mario, and we're not even factoring in the conveyor belt!
Odd place for a Venus Fire Trap to appear.
...and that's as far as I could go. One last thing I noticed was that this level wasn't that challenging for a World 8, with the most of the difficulty coming more from powerup stinginess than difficult enemy/hazard setups. Not sure how you intended the conveyors to work, but I doubt they would've made things much harder than they are now.
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(Current LP: Final Fantasy VI, MegaMari)