In the start of the game Mayor Hamilton brings you into his home and he will give you one half of the quilt. And over time in the second year you have to fix the clock tower and you find the other half of the quilt. After that you need to upgrade ur house to level 2 and water the flowers under the trees. Alan, Ben...etc. The flowers are really harvest spirits and they will give u a recipe to make a rainbow.
Get a watering can, do the quilt event then go to the old tree called Daren by the town hall
after you move into your house the mayor after a few days will give it to you
You need to ship 2,500G. Keep selling items until you get it.
After the mayor gives you the left half, talk to Gill then upgrade your house. Then talk to the mayor and he will give you a key to the back room of his kitchen. Go in there and you will find it.
After completing the rainbow quilt quest, water the flower that is under the tree in the city square near the clock tower and city hall.
The mayor will come to your house and say he has something to show you at his house. I forgot when he comes though.
toucan island
In harvest moon tree of tranquility you are supposed to smash the rocks with your hammer when it is smashed into tinier pieces pick them up , you will not find it in your ruck sack, you will find it in the carpenters building.
you can find them sometimes at gull island
you go to gulls island and fish far out.
i think you find them on any beach
At the goddess tree spring theres water so just fish there at night.