What's the difference between Mellow Mode and Classic Mode?
When you start the game, it asks if you want to choose Mellow Mode, which says "this mode makes the game a little breezier and more relaxed", or Classic Mode, which says "this mode is recommended for more experienced players".
What are the actual gameplay differences between the two?
In the demo of Yoshi's Wooly Word for the new 3ds xl, if you select melow mode, Yoshi grows wings and allows you to fly around the stage sort of like Kirby. This makes most levels extremely easy because you can just fly on the top of the screen for the entire level.