WMG / Balto

This movie is set in the same universe as Oliver & Company
Rosy is actually Jenny, who stepped into a time portal. She was adopted and changed her name, but resented her situation and missed her home, so she named her dog after herself. Eventually, she grew up into the old woman we see in Balto, met her younger self and faded.

Or she was reborn into an endless cycle of lifetimes of pain and loss and eventually became Bill Cipher. Whatever strikes your fancies.

"The Grand Design" in Balto II takes place concurrently with Evil Music
Over the course of the song, barely more than two minutes in length, it begins sunny, then shifts to a thunderstorm, then the rain stops, then the rain resumes once again, then it starts snowing, and then - immediately after the song ends - it's sunny again, then it becomes cloudy again mere seconds later. Clearly, this Weather Dissonance was not due to lazy screenwriters who couldn't settle on a weather pattern for an entire sequence. Instead, this sequence takes place concurrently with Evil Music, and the sudden and abrupt changes in weather are the results of Evil Ogel playing his pipe organ.

The events in the movie were made up by Grandma Rosy.
What actually happened is what happened with Balto in Real Life. But Rosy wanted to make the story more interesting for her granddaughter, so she came up with all this stuff about the half-wolf thing, the comic relief goose, the villainous dog, the love interest, etc.
  • Probably negated by the very concept of the sequels. Then again, she could have made Balto into her granddaughter's personal hero and made up more tales, or perhaps either are from the latter's acid trips. Definitely explains the spirit subplot in the second movie.
    • If you consider the sequels canon, that is. But if you do, then maybe they're fanfictions that her granddaughter wrote when she grew older. That would explain a lot.
  • The fact she was in a hospital bed with diphtheria and wasn't there to see almost all of the story supports this.

Kodi is gay.
It is confirmed that the writers were aiming to make Dusty and Ralph the official couple, so right from the start we don't get the common "pair the young opposite sex" leads. Then, he is the youngest of his litter (increasing the statistical change he is gay), and one of his defining character traits is his insecurities about himself. Granted, neither thing makes a character gay by default, but it would make it pretty consistent characterization wise. Finally, he does stare at Kirby sometimes, and seems to want his approval.

Steele has a Freudian Excuse
He and Balto were once good childhood friends...until one fateful day when Steele's parents were killed by a pack of wolves. This has lead the heartbroken Steele to despise Balto over his wolf heritage, and by extension much of Nome to ostracize him as well.