Cozy Paper Cut Illustration

Convert this image into a soft, handcrafted paper-cut layered illustration style, inspired by papercraft diorama aesthetics. Use smooth rounded shapes, simplified cute character proportions, and minimal facial details (dot eyes, blush cheeks) to create a warm, charming look. Apply stacked paper layers with visible depth, subtle shadows between layers, and clean cut edges that resemble laser-cut cardstock. 
Add a distinct white outer outline layer surrounding each main character, resembling a thick sticker border or white cut-paper backing, clearly separating the characters from the background. This white layer should feel like an intentional paper layer, not a glow.

Use a pastel color palette with muted blues, greens, and warm neutrals, balanced and calming.

Lighting should feel soft, diffused, and even, enhancing the dimensional paper layers without harsh contrast. Textures should appear matte and tactile, like thick art paper or craft foam.

Overall mood: cozy, wholesome, gentle, and

storybook-like, with a playful yet polished handcrafted feel suitable for modern illustration, children's books, or decorative art.