Heh. We are working on a similar style game. Let me give you couple of advices if you accept;
-You should determine a point to reach. This is important because once the player catches a rhythm, he / she can play the game with only one direction. For example, i only use swipe down. Played the game 15 mins but never used swipe up, right or left.
-You should use different kind of squares. The games only about speed change could be bored for the player.
-Also you should use different kind of candles to unlock.
-About the difficulty, yes it could start a little easier but general i think difficulty is fit for addicted players.
Anyway, good job! One of the unique style games i saw made by Stencyl. Hope you can reach success. Congrats!