Well, I took the weekend to replay Tingle- and more importantly get my review under 300 words. I failed regarding that second point... So I'll summarise the good and bad here.
The Good- Graphically, a joy to behold with a quirky design, bizarre looking NPCs and of course Tingle, whose walk is a true "WTF" moment when first seen.
- A sidequest count to make TP blush. More than 20 bottles, 30 recipes, treasure chests and decorations for Tingle's humble abode. Mapping is also a nice distraction while you explore.
- NPCs not only look good, but are some of the craziest characters you'll meet in any game and could give NPCs from recent Mario RPGs a fright.
- Makes budgeting fun... ish.
The Bad- Negotiating can be incredibly frustrating unless you have a negotiation guide (which the Internet now has- huzzah!) or you're on your second playthrough.
- The fight mechanic is baffling. Dive headfirst into an enemy, kick up a Looney Tunes dust cloud, hammer at your DS screen while rounding up more enemies to pummel. Without a bodyguard, this can cost more Rupees than you gain.
- Dungeons are overall "Meh", but a couple of boss battles and some extra exploring make it not all bad.
- Save system is the worst I've seen in modern games. Only one save point located at Tingle's house. Not always convenient to get to. Can lose of hours of gameplay if you Game Over.
OverallI like Tingle, I'm one of the few people who do in these parts, so when I heard he was getting his own game I was intrigued, and actually a little excited. What the game offers is something very different to the Zelda titles. While handling your Rupees is a tricky task, dungeons aren't up to the Zelda standard and the save system can leave you very frustrated (to put it mildly), Tingle RPG is worth a look. It's not up there with the "true" Zelda titles (although maybe it could be showing TP a thing or two in the sidequest and characters department) but it's fun and challenging in its own special way. Go on... Import. 
And now, the Q and A bit:
Does it take place in Hyrule?If not, where?
Nope.
I can't recall at the moment if we get an exact world name, but there are ten or so islands over three continents and none of them are Hyrule locales (although Lon Lon Meadow and Deku Forest would suggest some ties to the land).
How similar is it to a normal Zelda game? Does it prove my religion Is it actually good? How hard?
Very different. Don't be silly. If you can see past its flaws, yes. Hard enough to please.
