What was with Duke in the third film? He acted like he liked the sled dogs and Balto but was trying to put them out of the job. I get the point was he wasn't a straight up villain but his MO clashes so strongly with his personality that his character is far too conflicted. He doesn't fit the role he was put in due to his personality.
Why on earth didn't the townspeople react more strongly when Muk and Luk came running through the town? The one instance that shows any reaction to them is one man scooting out of the way. Yet, in the next sequence, the humans are shown to be standing within five feet of them, and the bears in question are "mauling"( from the point of view of the townsfolk) one of the local dogs. The humans are standing calmly as Muk and Luk interacts with Balto, despite the fact that two grown polar bears are in their town.
It can be assumed by the fact the humans know a good bit about Balto, maybe they knew they were his friends? Since Balto is clearly well known in town, it's possible they'd seen Balto hanging out and being friendly with them. Or just that the two of them were living on the outskirts of town for a long time and everyone was used to them. It happens in real life.
How did the townspeople trust Balto so quickly? At first they're terrified of him and hate him, but as soon as he brings the medicine back, they're running up to him and petting him like he was just a regular dog. Just cause he did something heroic doesn't automatically make him non-dangerous. He's part wolf for crying out loud!
That's...probably why they liked him. He brought them the medicine they needed. When he didn't start snapping at them when they approached him, they assumed he was all right.
They ran up to him because the medicine was attached to him, clearly. Also, he didn't just do something heroic, he did something heroic and doglike. Namely, running a full trek at the head of a team of sled dogs, without tearing any of them apart or eating the unconcious driver. I imagine that was enough for the townspeople, if at that point they were thinking that deeply about it at all.
The people accepted Balto because he had led the team. The whole reason people hated him was because they thought he was wild and dangerous. Then, he proves himself capable of finding and rescuing a team of sled-dogs and their injured musher who could not command the team himself, showing Balto's intelligence and leadership skills. Just that he had proven to be able to play nice with domestic dogs is reason to at least be a little less warry, no?
There are 2 instances prior where humans attempted to show trust to Balto; the first being towards the start of the movie with Rosie wanting to harness him into her sled and the second was by Steele's owner after the race to see how Balto may be used for the medicine run. The former was a child and was pulled away by her parents and rightfully so, the later changed his mind due to Steele inducing a growl from Balto. By the time the end of the movie comes around, Steele no longer could manipulate the situation against Balto /and/ everyone is just grateful for what Balto did. It also seems vaguely implied that Balto did small things (Rosie's hat) just nothing big that would garner as much trust as bringing the medicine. Humans... we are fickle creatures.