I think it needs shadows or something to help bind the buildings to the ground.

Hmm, I tried that and it looks worse, way too bright. There really isn't any good light flesh tone in this palette.

I recommend using white instead of light green for skin color to make them look less abnormal.

Yeah, but I really wanted to do something with that palette.
Maybe I'll do the idea properly some day.

If I were you I'd just replace the palette with NES colors and call it a total NES shot then.  NES has a nicer palette overall anyways.