This hack is impressive and truly feels like it could have been made by Nintendo. It's amazing how much better games like these look in color than in monochrome.
However, I did notice a palette bug in the third level of Mario Zone:
This occurs when losing a life in this level and restarting at the checkpoint (if you rang the bell, of course). It seems that when restarting at the checkpoint, the palette for the beginning of the stage is used, instead of the palette that is normally used in this spot. If you move far enough to the right, however, the correct palette shows up.
Version 1.12 of the patch was used, and this bug shows up on real hardware, as well as BGB 1.5.6.
Other than that, amazing job on this ROM hack!