There should be some counter in the corner or something that says how many cats need to be distracted before winning.

If the number of cats needed to be distracted reaches zero or your health reaches zero show a game over screen. One could have victory text and the other could have a game over text. Both could have a button to retry.

There should be an indicator of how much yarn a person can use. The mechanic could be something like there can only be three pieces of yarn in play at anytime. If a yarn is destroyed it comes back into play, so we reward players for using yarn in good ways.

Playing a piece of yarn in an inopportune place means you might not get it back. This can work similarly to how we limit the number of cats in play and then recycle the sprite when they "die".

Make music relatively lower than the effects

I thought I did that here: https://github.com/copperwall/Cat-Defense/blob/master/js/newmain.js#L174

It seems like all the cats are starting on the same step, though.

I think we can do this by creating a new game state that isn't the main game loop. It could just have a title, and a start button or something.