i always think that instead of making a fangame, it's better to just make an original game... as far as distributing and promoting your game because you won't be using someone else's IP.
That's really only a problem if they try to sell it. Which would be silly. Nintendo is very tolerant of fan-made games. As far as I know they've never issued a C&D to anyone for making a free fan game. Considering the staggering amount of them it's probably not worth their time. Plus it's kind of a dick move to pull on your fans.
As a personal choice, I wouldn't ever make a fan game because I just don't feel right about using someone else's stuff. It's an originality thing. But I have played a few really good fan games, so they can be done right. It's just a sad fact that most of them aren't.
As for this game, I think doing the art in this painterly style is a good step towards "done right."