I'm not sure if this was a bug or not, but I noticed the first time I picked up the package the boat turned around with the dog on it. The second time I picked up the package the boat turned around and the dog was gone.
For a kids game I would tone down the difficulty just a little. Not much. The Bees inside of the wind mill was a little daunting lol. It got fairly challenging when the plane was shooting at me, but I liked that difficulty. However, I could see my 7 year old niece and nephew struggling with that.
One thing that would look nice is potentially a shadow or reflection in the water for the owl. It would help show how close you are to hitting the bottom boundary. I noticed you can get what appears to be close to the water and make water splash up (which is a nice touch) but it was kind of difficult to know when I would go too far. The user on the forums named BOP has some good tutorials about reflections that you could possibly use and modify.