First, I'd like to start with: this is adorable! I love the cute (sad) little pup and the aesthetics. I didn't encounter any issues with collision, but some of the boxing seems a bit large. It would be so much work, but I'm imagining how sad and impactful it would be to have the sea lion react to hitting different types of trash differently. I absolutely recognize the time and complexity of spritework that would require, but your lovely project got me thinking about it - so good job!
I felt so sad for the little pup when I read the story, too. I think adding some background helps a lot!