Husk--thanks for the revisions. Definitely moving in the right direction! We like the simplicity of this design, in particular. A few comments:
SHAPE: Could you try making his shape a bit closer to the original, inspirational Nintendo (Mario) squid? The current shape looks a bit "strawberry" like and we'd love to see what it would look like with a more "eggplant-like" shape.
FEATURES: Can you try expanding his features--specifically, making them larger and also having them cover more real estate on his overall head?
MOOD: Can you try removing his smile (or making it extremely subtle), but still making him look like positive/optimistic/energetic? Maybe with eyebrows, cheekbones, general look, etc.
TENTACLES: Can you try making his tentacles look a bit more stubby?
Cheers--looking forward to next round of revisions!