Good but...
So I kinda liked it, but I wasn't blown away like everyone else. Could be I'm growing out of video games, as several have lost their luster. That and I've played a LOT, so "there's nothing new under the sun" so to speak.
Since you've gotten a LOT of comments pointing out the good, I'll just give some (hopefully) constructive criticism (or, really, just my thoughts while playing). Being a long time video gamer, I hope they are helpful and not discouraging. Of course, I'm probably one of few who felt this way, so my thoughts probably don't hold much weight.
Graphics:
The graphics were good, not my style, but definitely good.
Story:
So I saw William sun bathing threw me off from the start... just didn't really fit the feel of the game. In the first one he was much more helpful and it was neat to see the interaction between him and Sly. In this one you really only need to talk to him twice, once to start, once to finish. He's basically chillin' and doesn't really care about what's going on. He'd like journal back, sure, but doesn't seem to care that much. I don't really care that I'm searching for the journal other than to read it. ie For me I felt a lack of real desire to search for the journal. But if you wanted the focus to be on self motivated exploration, then that's what it was.
Power-Ups:
With the power-ups, I felt like I had 70% of everything before I got them, and they were only helpful to get that last 30% which just felt like more searching, and (to me) were not that fun. I find I enjoy the progressive addition of power-ups (ie double jump, then flying), rather than "BAM you can practically fly!" The game was not long enough to warrant progressive power ups, but that's my preference.
Exploration:
I was a bit disappointed with the exploration. I really liked the many invisible pathways in the first, verses the several hidden rooms of items in this one. Seemed to flow much faster and make finding paths enjoyable when you got to pass threw a part of the terrain. I was also thinking the map looked big, but with lots of "white" space (ie black ground and empty sky). I was hoping there would be a whole underground section of the map or something.
Mushrooms... Other than collection them for newgrounds points (which is also just silly), I didn't really feel like there was any reason to collect them, other than they were just sort of there. Again, adds to the exploration thing, but I didn't have any real desire to collect them, other than force of habbit. About as useful as 1up mushrooms in Mario 64, lol.
Music:
No complaints. Love music and how it adds to a game. and The creation of this music fits perfectly to your game.
The Summation:
This game is neat to be able to explore explore a little region, the goals are simple but enjoyable. The graphics and music and animation are very good and create a serine atmosphere. As a wanna-be game designer, this is an impressive piece of art and work. The fact that you did all the graphics, animations, story, coding and music is a feat in itself. Some things are certainly lacking for my tastes, but you can't please everyone, and you did a wonderful job appealing to the majority of newgrounds, which is also a feat in itself! Hope this was helpful, but if it not, ignore it and continue doing what you're doing!