I think it's got potential
I'm guessing it's AU, since they can go to Phantomile with a plane
There are a few things though
You should add more detail. describe where they are, what's the setting like, what's going on around them, and most importantly, describe what people look like. I had a hard time visualizing Toby cause i had no idea of what he looks like, and explain more about him. his backstory, his relation to Klonoa, how he helps the plot progress. Go in to a little more detail about things, like what game was Klonoa playing on the SNES, ect ect.
Also, i feel as though things happened too fast. slow down and explain more about each situation, expand on everything, make it last longer, otherwise it feels rushed. a good, simple criteria to follow is the 5 senses rule. in each situation, describe how the characters react to it with each sense. for example:
"Klonoa huffed and panted heavily, his body shaking as the intense battle continued. He felt the rush of his enemy pass by, catching whiffs of it's rotting stench.
Suddenly, the monster reared it head and let out a bloodcurdling screech, rendering Klonoa useless for a few moments as his sensitive ears fought painfully to free themselves from the horrid sound.
Clenching his teeth, he spat as he tasted the bitter, metallic flavor of his blood as some leaked into his mouth from his previous head wound.
Getting into a fighting stance one more, Klonoa scanned the surroundings, desperately looking for anything that could give him the upper hand.
Picking up a faint noise from his ring, he could tell Lolo was getting tired too.
He had to end this
Now
Mustering up all his remaining strength, he pulled out his wind sword and dashed toward his enemy. Every muscle ached and pleaded to stop, but Klonoa knew if he didn't make this last shot, it would all be over.
Jumping to the side as the beast spat burning acid at him, Klonoa lunged at it, swinging with everything he had as he swiftly dug his sword into the monsters chest, striking it's heart.
The beast screeched and howled in pain as it bolted around the room, until finally, it collapsed in a pool of it's own blood.
Relieved that the fight was finally over, Klonoa flopped onto his back on the cold, wooden floor.
His ring glowed, and a blue light shot out, as a figure emerged.
Lolo, also exhausted, sat down beside Klonoa, panting.
Looking at each other, they smiled, as they knew if it was not for the other, they would never have survived"
There, i just whipped that up right now.
Just a little example of how including the 5 senses can help in both visualizing, and connecting with what's going on in a story. To a reader, they don't actually know you're including the 5 senses, but they're there. and even though they may not know it, it subconsciously helps the reader connect with the story and characters better, knowing that they're feeling actual things that the reader may have also felt themselves, allowing them to have a better understanding of the story itself and help to raise the level of immersion into the plot and characters.
I'm no professional writer, it's just a little skill i picked up over the years, and i hope it helps you as much as it's helped me
all in all though i rather enjoyed this chapter. i know how hard it can be to write a story, i have 8 in progress right now that im having trouble keeping up with. anyway i faved it and im following it too i can't wait for the next chapter, good work and good luck!