For the puppet thing, I think the simplest action would be for the fire to fly from the AT-AT, and the Luke reflects it back at the walker, knocking the whole walker away. This action makes the kids laugh. Since the story is being passed along word-of-mouth, the facts could be embellished.
Or the fire just floats in between them and puppet Luke dances around mockingly. I don’t know if a puppet brushing his shoulder would be feasible or clear to understand.
It is a very very brief shot. Not even two full seconds I don’t think. So it shouldn’t be too complicated.
I know Chase said he could film it, but I think I could make the puppets and film this too, if someone could just make a clean plate to put it on.
And speaking of Luke’s legend sparking hope in the galaxy, I wonder if you could somehow make it clearer that people of Kijimi are revolting against the First Order. The patrols, stormtroopers going door-to-door questioning people, the distant explosions later on during Poe and Zorri’s convo. Though that might contradict Poe’s whole speech about people giving up.