The skulls are a motif of the artist,
who has a fetish for who specializes in skeletons, for whatever reason. Either way, why is it that Lolo is the only one who seems to have a personality shift? Is it because Klonoa found out he likes boys left Lunatea at the end of the second main game? If so, I guess Dream Champ Tournament never happened then.
And second... why Lolo? Why not Klonoa? Some series are represented by the main character, and some aren't. That's bogus.