I'm also a rookie here but I believe I can help pointing some stuff out.
The very first thing is that the remodel for Diglett is already made, you can check it on the modeling progress sheet, all it needs is to be animated.
They also ask for models to be as low in polygons as possible, this one has 1.5k faces, but for a simple looking pokémon like this the face count should be around 500.
I believe the face count would go down considerably if you redo the nose (or tooth or whatever it is), I believe you used a sphere and merged it with the model, but those are just too detailed. It is better to do it yourself, it shouldn't need more than 9 or 10 faces to do it.
Another thing that could help reduce the faces is deleting all the stuff inside the mound and the corners of the square at the floor, make all that hollow space into a flat face at the very bottom.
Finally, try to make the mound rounder and level the edges at the body since, as you can see on the screenshot, there are two edges that just go down too suddenly.
Since it's already done, i don't think you should keep doing it for Pixelmon, but it's a simple model to start and I'd say you could still use it to practice.
Hope this helps.