Press the flag, then type the name of the character the icon represents when prompted. There are 12 icons in this level. I am a little amateur to how this works, so sometimes you have to get it right the first time or you won't progress. (Though I can't say that's a glitch)
This took all day. Congrats if you make it through. Level Two will come. The last one is spelled P-I-N-O-C-H-H-I-O Don't forget to click on the buttons that look like a heart and a star!
