Quest contribution!

I don't know, if this is possible or it isn't a remake of some previous ideas, but:
And yes, I LUV mushrooms! 

That's really clever! I like that idea! It's a bit tricky to get to work, but it would be really neat!

How about some other Knytt/Creature asks you to go down a pit of some sorts to retrieve something for him. You go down, to find nothing there. As you climb up. he tries to trap you there. You have to escape through a hole in the wall or something.

You find a school that is missing something needed for a class. You find it later, and they reward you with something small. Then, if you check on them later, they're missing something else. You find it, they reward you again.

Ooh, I like the first one a lot. I'll see if I can do that somehow.

Since Nifflas is really good at getting intriguing little creatures in his games, would it be possible to have a small creature/intriguing device that is really interesting but runs off? If it left a trail, or clues as to where it went, it could eventually lead the player to a secret. Or a puzzly area in which they get stuck..

Or alternatively, if it was like a rescue dog or something (rescue spider thing?) lead the player into a small area where another character is stuck. Of course there would be a way out for you, and you take a note from the person who is stuck to someone else to inform them that this person is stuck.

Not so much a quest as a diversion 

A dungeon with special areas in it. Every area takes a different power to go through. At the end of each area there's a prize. At the end of the whole thing, there's a HUGE prize.

You find a group of Knytts, and shortly after something happens to their leader. They naturally blame you, and "banish" you from them. If you find out the true culprit, they'll apologize and give you a reward.

You find a dying Knytt while out exploring. You bring him to the nearest Knytt doctor/nurse/apothecary. The doc/nurse/apothecary saves him, and tells you that the Knytt was poisoned (thus an apothecary could help). You must find out by who and why.

You find the first of a series of journal/diary pieces. After you piece it together, you learn of a very interesting and intriging story.

You find a, say, blue mushroom. This starts a trading quest, such as the one in Legend of Zelda Wind Waker, where you trade an object for another, go to another person, and trade THAT object for another.

Spoiler: (click to show/hide)

The game takes place far into the future, probably at around the same time as Saira. As you know, the survivors were those to escape the surface of earth. However, while humans moved into space, all other creatures started to dig down. The game takes place long after the creatures have settled there, and as the surface is not habitable, nobody really knows what's up there any longer. That's however pretty much all I know about the backstory. It probably won't play an important role in the game either, the game will be about some much smaller task, just like in Saira which have a backstory about all humans disappearing but it all comes down to trying to find a way to travel to a specific friend. Got any ideas for the main story in this game? I'd love to hear them!

You know, the idea of the surface being abandoned brings an interesting thought to mind...what if your character was an explorer, archeologist, treasure hunter, etc? You could be trying to hunt down a famous ruin of legend built by the humans, or even several of them. If you find yourself wanting to make more levels, you might have them featuring different ruins.

For example, your goal could be to track down a legendary tower from humans times. It's an ancient (ancient being "from when the humans vanished" in this case) tower rumored to reach far into the sky, with a priceless treasure at the top. The catch is that nobody knows where it is, so you've got to explore a number of other "ruins" built by humans in order to uncover clues to its location. These could range from a mining shaft where you uncover shipping orders to an underground shelter containing a library with a map, or combinations of several such things. I'd imagine that since there were so many problems on the surface, people would've retreated underground, which makes it fairly feasable that there would be a number of ruins under there. (Other ideas include an automated factory that may or may not still be fully functional, a sealed research lab showing signs of a hasty evacuation, etc.)