Do you have any budget for artwork, or maybe a talented friend who'd like to go in it with you? Or maybe you have the talent yourself? Some simple line drawings can be effective even on monochrome e-readers. Examples: Alice in Wonderland springs to mind as one I've re-read on my e-reader not long ago, and even an adult book: "Three Men in a Boat (To Say Nothing of the Dog)" by Jerome K. Jerome - see the copy here on MobileRead, it is very well formatted. Another example I've read recently, that falls somewhere in between in age groups, is "One on a Time" by A.A.Milne - I got a copy off Project Gutenberg.
Since it's a children's book a larger font is also appropriate - and given what you suggested might the full length of Heart of Rock (10,000 words wasn't it?) I would have thought it would probably stretch out to well over 8 pages. (I wrote a short story of 4300 words recently that went 8 sides of A4.)
Aside from all that, no I don't see a problem with a book being a collection of short stories, though you may have to take extra care to make sure the three-part Heart of Rock really does look like related parts rather than separate stories (you don't want people reading them out of order).
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