This is looking more and more fantastic as you go.
I have a thought about finding the broken toys: In the interest of making it more deep and immersive, perhaps he could find several parts of a particular toy that can only be fully repaired once he finds all the pieces? Just a thought.
I'm very impressed that you've come up with all these concepts on your own, from the art style to the controls to the characters. I really hope this game becomes a reality!