Farming Rupees in the remake of Link's Awakening shouldn't really be necessary if you're going for all the side quests. Even the many expensive Chamber Stones in the Town Tool Shop should practically pay for themselves if you keep doing all of Dampé's golden challenges at the end of the game...
Still, if for some reason you need to grind more Rupees or want to hit that 9,999 Rupee limit in the game, then the best way to do this is via the Chamber Dungeon. Inspired by this and similar topics on GameFAQs, I went on to try this myself and got to the maximum amount of Rupees within less than an hour.
You'll need the +Rupees Effect, which requires all 50 Secret Seashells, so you won't able to do this until the end of the game – unless you have saved such a dungeon onto an amiibo. The way how it works is that the more chambers you have inside a dungeon, the more you will get from the +Rupees Effect.
My theory was that this might be tied to the four dungeon tiers (see here), where a dungeon made out of 31 chambers should give you the maximum amount already. After some research this didn't turn out to be the case, but the result was very similar nonetheless. The amount seems to increase 10 Rupees per chamber, but there is a cap at 300 Rupees, which means a dungeon of 30 chambers already gives you the best outcome for the +Rupees Effect.
Now the trick is to build a dungeon, where the entrance and the Nightmare's Lair are very close to each other with one chest for the Nightmare's Key in between. Then you fill the rest of the dungeon up with chambers that don't have any chests or locked doors. If there were more chests, you would need to go get them. And if there were any additional locked doors, you would need to place more chests. And that's why you need to avoid both in order for this to work properly.
Luckily, the Chamber Dungeon offers a ton of featureless chambers, mostly the rooms for the different bosses and mini-bosses. Rooms with stairs are also okay, but you'll need to place another stair somewhere else and you can easily build a Rupee farming dungeon without any stairs at all, which makes it look cleaner.
So, this is my solution, feel free to copy it:
I shaped it like a Rupee, because that seemed rather fitting for the task. It has 36 chambers in total, which is a little bit more than what's needed, but I was going for the looks here.
And as you can see, it takes less than 40 seconds to finish this dungeon. With loading and waiting times we're talking about one minute here for 300 Rupees. You do the math... You can probably build something even more efficient, but it was good enough for me.
There are two chambers between the entrance and the Nightmare's Lair, but that's because I couldn't find a room that gave me both a treasure chest and enough clear space to collect all Rupees. Plus, the chest for the Nightmare Key might end up being in the way of collecting the Rupees...
At first I thought that some narrow space would make it the easiest, e.g. the small tunnel with the winged hearts from the Tail Cave. But then you won't be getting all Rupees, maybe because they are blocked by Rupees that are already in the same spot or because they are falling into the void... They can even fall on objects, like the elephant statues from Level 6.
So, the ideal place for the +Rupees Effect would be a fully blank chamber in the full square size. And as chance would have it, there is actually such a chamber in the game: the Winged Item Chamber, which you can get via amiibo.
The only disadvantage of that chamber is that the many winged items might block some of the Rupees visually, where you want to collect the ones around the center quickly early on, as I did in the above screenshot. But despite this small flaw, it still seems like the best choice to me nonetheless.
For the following chamber, where you have the only chest, I used the a room from Level 6, which normally contains the Powerful Bracelet, because the room is easy enough to cross and doesn't come with the lengthy "chest spawns from above" animation, because the chest is already there:
And of course the boss at the end is Moldorm, because he dies quickly in two hits and can be defeated within seconds. All the other bosses will take much longer, except for maybe the Hardhit Beetle, but no other boss dies as fast as Moldorm in this game.
(The 32 optional chambers include all the other bosses and mini-bosses, by the way, with the exception of Blaino and the Dodongo Snakes, because their chambers always have chests in them. But this way this dungeon also serves as a neat, little boss rush. All in one.)
I saved this Chamber Dungeon onto one of my amiibo, so the next time when I'm going to replay the entire game I should be able to get lots of Rupees early on. That way I could easily get enough money for the Bow after the second dungeon, which is nice to have, because the Bow can be very helpful in both the Color Dungeon and the Key Cavern.
You will be getting all the item upgrades, even if you are playing this on a fresh file. If you want to try this yourself, make sure to wear the Red Mail when you clear the dungeon, so that you will also have the Red Mail right away and Moldorm can be defeated quickly via two normal hits of your Koholint Sword. This will make the process as comfortable as possible, even early in the game.
