There are so many things wrong with this movie.
The introduction was sort of okay but it was drawn out way too long. Do you think that 46 seconds(!) of panning from the sea and the sky to a pixelated Sonic sitting on a deck chair is entertaining? It's not. The pixelated Sonic also ruins the ambience of the scene btw.
In the next scene, Sonic is having a "conversation" with Knuckles. However, he remains pixelated on that chair, and the standing Knuckles is pixelated too. Neither of them actually move or talk! The dialogue is very monotonous and boring. The font is shockingly bad; it looks like the font used on karaoke lyrics; are we supposed to sing along using their conversation as lyrics?
Following that is an atrocious purple gradient background. The "animation" is a bunch of low resolution pixelated images that don't move around. You could say it's "sprite animation" but the sprites are not animated at all so it's not. The dialogue is, again, not very engaging, and it has awful grammar to top it off.
Next scene. Wow, Sonic actually moved. And he... smiled? The teeth you drew looked way out of place.
Next comes an introduction sequence, and what do we have? A bunch of low resolution sprites that mostly don't move, some images, and some music, all of which you don't have the rights to, nor do you credit your sources.
Next is a boring fight sequence between Sonic and Knuckles. Kudos on actually animating this time, but that fight sequence was very uneventful (you didn't even give Knuckles a chance!) and their "wounds" at the end were as unconvincing as Sonic's drawn on smile. Also, wasn't Knuckles supposed to give Sonic some chilli dogs or something? What happened to that?
Now we're back to stationary sprites and now the background is also low resolution. Great! Bad grammar and writing make a return.
And on to the next scene. We have large text that fills up the entire screen rather awkwardly. The mixture of animated sprites and the lacklustre non-animated ones is very unprofessional. Bad grammar is back again.
Next, Sonic is at home with Amy and gets kicked by Shadow. I thought Amy was worried about destroying the new house? If she really was worried then why is she starting a fight? This makes no sense whatsoever.
Next there are low resolution sprites again and ugly text, Then a picture is overlaid on top of that with even uglier animated "To Be Continued" text.
Last sequence now, with still images and music, which, again, you don't have rights to.
I've basically pointed out a lot of the things wrong with this animation. Now I have a few pieces of advice for you:
1. Improve your grammar. You don't have to be an English nerd or anything, but if you're telling a story you need to have good grammar so it doesn't break away from the immersion. Also, don't just liberally use swear words like "shit". It's bad form, and should only be used for emotional effect. In the instances you used them they felt very forced, kind of like you were just trying to show off that you have "shit" in your vocabulary.
2. Use better fonts if you're not going to be doing any voice acting. The fonts you're currently using are very obtrusive and they take away attention from the important participants because they just stand out so much. With subtitle fonts, subtlety is key. You don't want them so big; you want them to be readable and NOT distracting.
3. Learn how to animate PROPERLY. Your fight sequence animations were quite awful, except for some of the sprite animations which actually weren't that bad (unless you stole those). The energy balls(?) are very poorly done. They're just coloured circles that look very awkward as they fly towards an opponent. The sprites don't move around most of the time and they look very ugly almost all the time.
4. Learn how to put images together neatly. A lot of the time (actually all the time) it's obvious you just mixed a bunch of sprites and backgrounds together. Maybe one of them is too big and the resolution suffers, or they just look like they don't belong where they are. This applies to the text as well. Don't just settle for karaoke font and call it a day. And what's up with that "To Be Continued" animation? Do you think that looked good? Your introduction and ending sequence could also use some work. As of now they're just poorly done montages. It's like you just picked a bunch of images, did a bunch of animations, and called it quits. You took no effort at all to actually do a full animated sequence, or even a seamless collection of images. This flash animation is full of those seams. You need to stitch things together in such a way that it looks like they were never separate at all.
5. Don't use copyrighted material you have no rights to without giving credit. Seriously, it's illegal. You should at least tell people where you got things from.
6. Have interesting characters. The characters in your story are not very well-developed. I don't think I'd feel sympathy for any of them if they should die. They're just like hollow to me. To add to that, your characters all seem to have one type of personality. The dialogue you wrote could fit into any one of them.
6. Have an interesting and consistent plot! Seriously, if your characters have no personality at all your plot will have to be stellar. But your story is boring; it doesn't go anywhere, it's inconsistent, it contains plot holes. Your delivery of the story is not very good either, in part because of your bad grammar. If you have bad characters, bad animation, you need to have something good, but it seems that your plot is not good either.
I honestly felt no excitement whatsoever to anything that happened. There were no cliffhangers, twists, red herrings, adventure, mystery, not even any considerable action. I'm sorry to say this but there just wasn't anything engaging about the plot.
There are many more things you need to work on, but I'll stop there. You'll have to figure out yourself in which direction you'd take your art.
tl;dr - This animation has no redeeming qualities whatsoever so to make better ones in the future: fix your grammar, fix your art, fix your story-writing skills, actually put work on your art and use your own imagination and creativity to actually entertain people and not be boring.