Painted backgrounds do not cover up terrible artwork, if anything, they make it more obvious.

There are so many problems in this image that I could write an entire essay on it, but to save both of our time, here are the main ones:

1) You colored outside the lines. I mean, seriously.
2) No variety in the buildings. Not each building has a window on the left and the right, I mean you need variety.
3) Bad color scheme.
4) It just plain looks wrong.

Painted backgrounds look nice if you are a skilled artist, but if you're just a kid who cannot draw, then they only make that more obvious. You'd best stick to Flash.