You might enjoy an entire talk on using a limited color palette for graphics in early games and how it stimulated creativity https://www.youtube.com/watch?v=aMcJ1Jvtef0
"In this GDC 2016 talk, Terrible Toybox's Mark Ferrari discusses and demonstrate some of his techniques for drawing 8 bit game graphics, including his celebrated methods for use of color cycling and pallet shifting to create complex and realistic background animation effects without frame-animation
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Thank you for sharing this incredible talk! Mark captures one of the main topics in art making perfectly: the power of limitations.
Also: “The environment was small enough that you could actually think about it”
And a direct link to the canvas cycling demo mentioned in the talk, as well as the blog describing it and a Q&A with Mark Ferrari:
http://www.effectgames.com/demos/canvascycle/
http://www.effectgames.com/effect/article-Old_School_Color_C...
http://www.effectgames.com/effect/article-Q_A_with_Mark_J_Fe...
Sadly, Joe Huckaby (who implemented the web-based demo) never got around to finish the promised drawing tool. I wonder if any other pixel art programs since then have added interface support for color cycling.