This level is by far the most confusing level of Star Road, you will probably need a Blue Yoshi for this level as flying will help greatly. It would also help if the blue switch has not yet been activated.
If you do not have a Blue Yoshi, you will have to fly using a cape, but it is considerably more difficult. It is nearly impossible to grab the key without flying Yoshi if you have not activated the blue switch.
The level is even easier if you have cleared all four of the switch palaces. With this, you can just land on one of the yellow switch blocks. Then you can just keep on running until you approach the key. You can also use the outlines of inactive blocks to make your move. The order is yellow, green, red and blue.
To continue the star road reach the normal exit by flying right.