How does the level actually progress? I don't really understand what you are doing or how it's laid out, because the impressions are like the opposite of what the trailer shows.
If you mean the ways the levels are laid out, from what I gather:
There are initially 4 worlds with 4 levels a piece. The Water Sprites are the level-ends.
-Upon completing all 16 of these levels, the first ending plays.
In each of the game's levels are extra sub-levels, akin to the Virtual Boy and Game Boy images that were just posted. These levels also have Water Sprites at the end of them.
-Upon completing all 16 levels and 16 sub-levels, the second ending plays.
The fifth world is unlocked when the second ending occurs, or when the first 32 levels are completed, whichever you prefer.
-To unlock the levels in the fifth world, however, you must gather all diamonds from the 4 main worlds. Only the main levels have diamonds, and it sounds like there are 100 in each.
-There is a level per world to unlock, meaning 4 levels in the fifth world. These levels also have sub levels.
-The final ending happens when all 20 main levels and 20 sub levels have been completed.
Also, in order to get to some sub-level entrances, you will need powerups which Grannie will give you when you reach certain diamond amounts. Unfortunately, dying removes this special ability, so try not to die!