Absolutely no reason for you to stop working on a script - however it is highly unlikely that it will ever leave the very dark and secluded world of "fan fiction" for a myriad of reasons...
You could come up with an amazing, high-quality script for a movie, or you could come up with an absolute piece of crap, it wouldn't matter - but you should continue to work on it, if that's what you want to do.
Unless you have your own movie studio or company or through a bizzare quirk of chance, it's not going to be made into a movie, and if it was, I don't think you would get a lot of support from the fans of Cave Story, or Pixel himself.
If I read correctly, it looked like you are planning to change the ending to be happier... it's really not a good idea. Pixel wanted his 'good' ending to end a certain way (I'm trying not to drop any spoilers), and simply because you didn't 'get it' is no reason to change something so huge in the story...
Changing small items to make the story flow a little better - sure. Giving the main character a couple of lines to engage him with other characters - I could see that working. But changing a major aspect would be messing with the fundamental essence of the story, and not in a good way. I think that is the reason why many movies based on already existing stories turn out bad... once you damage the essence, you can do all you want to make the characters act or look the same, or put in neat little 'inside jokes' or something, but you've lost the most important piece of the puzzle...
My advice to you would be to definitely go ahead with the script - make it as true to the story as you want, or deviate as much as you want (but keep in mind what I said above), and share it with people all over the place as a work of fan fiction - perhaps even using it to springboard a more serious career in the writing/script-writing business.
Good Luck...
