Transform the image into a soft handcrafted papercraft diorama illustration. Use smooth rounded shapes, kawaii-style proportions, and minimal facial features (dot eyes, subtle blush) for a warm, cozy feel. Create layered paper-cut elements with visible depth, clean laser-cut edges, and soft shadows between layers. Surround each main character with a thick white paper outline, like a sticker border or paper backing, clearly separating them from the background; it should look like real layered paper, not a glow. Use soft pastel colors with muted blues, greens, and warm neutrals. Apply gentle, diffused lighting and matte paper textures resembling thick cardstock or craft foam. The overall mood should be wholesome, calm, storybook-like, playful yet polished, with a charming handcrafted aesthetic suitable for modern illustrations and children's books.