Cute game with a fun presentation (especially the art)! I think I lucked out on the rules on my winning run, I had three specific "no circle version of X item" rules and then a "no circles at all" rule.
Other comments have touched on my feedback already, which is that I didn't realize the dragon told you the rules (I usually don't look at the screenshots or read before playing), and the overlapping items can make it difficult. My suggestion for the latter would be to prioritize items added last (and are on top of the draw order) when picking stuff up.