If you did collect all of the special items in each of the stages, you'll be able to play this level. It's a pretty simple level really. Walk to the right and avoid the large white enemies that resemble teeth and the Cat Ball enemies. You can't jump onto the Cat Ball enemies because they will damage you, unfortunately. Continue on where you'll find a few more enemies and stuff, and a tube on the far right.
Continue up the steps and enter the conveyor tubes ahead. Walk right two screens until you reach a large open room with several potions sitting around. You should grab the Yellow Potions and just ignore the other potion. Jump up to the next room. Ignore the Cat Ball enemies inhabiting this area and just head left. Toss a star at the ones in your way to make them run away.
At the far left, a Cat Ball will be waiting on small platform ahead. Get close and it will jump off and chase you. Just jump over it and continue upwards. Jump over the Cat Ball on the white enemy ahead and continue on. Further ahead there will be a few more Cat Ball enemies and another white enemy, and you'll be at the final boss of the game.
The final boss is a tall lanky fellow who's dressed in a black cloak which obscures most of his body. He only has one attack at this point, a wall of wind that moves away from him, but you can jump over it at the right distance. After he attacks, he will teleport to a different spot. The easiest to damage him is to wait until he teleports and does his wind attack.
Stand fairly close to him when he reappears and jump over the wind attack as he uses it. And finally toss a star at him to do some damage. After you hit him three times, he'll lose the cloak and start doing some crazy ninja moves as well as a new attack. The new attack is just a volley of small white balls that home in on you but they are easy to dodge.
He will start jumping around as well which makes it more difficult to damage him. The best way to damage him now is to wait until he jumps and toss a star at him when he lands. You likely won't be able to damage him any other way. Keep away from him when possible and just toss stars when he lands. It takes five more hits to defeat him where he'll explode into what looks like confetti.
Congrats. That's the end of the game, enjoy the real ending.
Gimmick will start walking through the palace until he comes to a door. He finds the girl inside and she hugs him after he walks inside. The palace starts falling apart as they both start walking outside and escape into their own world as the palace disappears. They end up back in the girl's bedroom and they look out the window. After that the credits will roll.