The Galactic Federation is actually the local version of The EmpireWell really. Even their Reasonable Authority Figure Grand Councilwoman is willing to destroy entire planets to kill one fugitive. Inhabited planets. Apparently they don't consider species sentient if they don't have hyperdrive. She's willing to accept 'I own him' as a legal excuse not to take Stitch...which means they recognize slavery. They've got serious prejudice against genetically engineered lifeforms, killing them on sight. Employing a Boxed Crook is common enough its more worrisome that he'll hurt the mosquitos then that he'll be let out of jail. From that point of view, the Grand Councilwoman is actually the Affably Evil Antivillain head of the government for an alliance of Scary Dogmatic Aliens. They've even got the dim, gothic interior architecture.
By Galactic Federation standards, Mosquitoes are cute and/or beautiful.Think of the wild animal species that animal rights groups on Earth publicize: Giant Pandas, Bengal Tigers, Bottlenose Dolphins, Orangutans, Sea Turtles, etc; There may be species more valuable to the environmental balance, but those that get all the attention are the ones that we like. Though technically Humans are just as "endangered" as Mosquitoes, the insects are aesthetically pleasing (as demonstrated by Agent Pleakley) and therefore protected. Cobra Bubbles caught on to the attraction and used it to save the planet.
It wasn't the content of Stitch's brief speech that horrified the Galactic Council, it was the context.Stitch's words have been translated to roughly mean "I will destroy." That's bad, but not quite as bad as the reactions of the council members would indicate. Those words must therefore have some historical significance similar to repeating a snippet of one of Hitler's tirades in the German Bundestag (German federal parliament) today. The words in themselves may not be so terrible, but such an unthinkable act would shock and infuriate the German parliament.
Lilo and Nani officially agreed to be Stitches wardens.In order to adopt Stitch Lilo signed something saying she was Stitche's caretaker and agreeing to be responsible for his actions, and might also say Lilo has custody of Stitch. This is enough to officially say Lilo is responsible for making sure Stitch stays in exile and doesn't cause too much damage to the mosquito population. Since Lilo seems to be five Nani would have to sign too and would be the person truly held responsible by the State of Hawaii if they let Stitch run around and he attacked somebody. These documents assume Stitch is a dog and not an intelligent super weapon. However, the Galactic Federation could ignore the document's original purpose and take it literally. The grand councilwoman had to give Lilo and Nani a higher level of citizenship than most humans to make this legitimate otherwise it would be like a jail leaving a dog in charge of guarding a prisoner, and she still had to make sure Lilo and Nani did the job they agreed to do.
In Leroy and Stitch, Jumba's and Stitch's rewards were actually tests. Stitch passed. Jumba passed eventually.Stitch and Jumba both seemed to be reformed by Leroy and Stitch, however it's possable that Jumba is only behaving either because he's being watched closely by Pleakly and Nani, or he simply lacks the facilaties to do anything on a backwater planet like earth. The best solution would be to give him his lab back and pretend to trust him and see if he falls into his old habits. The goal of Stitch's reward was to see if he could function without Lilo or revert back to his original programming. Stitch was homesick but still acted as a responsible citizen. Whether Jumba passed is debatable. His first instinct was to get back to illegal genetic experiments but he did not get very far before he was forced at gunpoint to make one by Hamsterville and could easily have decided against it, plus when he makes Leeroy it he gives it an off switch. When Jumba decided on his own to go back to Hawaii instead of going back to his old lab it counted as a pass.
Leeroy was either designed to be a wussed out version of Stitch, or to degrade quickly.Jumba was making Leeroy at gun point and there's only so much Hamsterville could do to test his capabilaties without giving Jumba an opportunity to escape. Either Leeroy beat Stitch partly because Stitch was distracted by missing Lilo, and Leeroy got the jump on the other experiment's because he knew their locations strengths and weaknesses and they had gotten complacent, or he was genuinly on even footing with Stitch at the time. However, either way at the stadium every other experiment proved itself capable of fighting him.
Bubbles is a retired Agent J.Agent J clearly attained a noteworthy status in the Mi B universe, so it is not at all implausible that he worked with the Grand Councilwoman. Heck, the Grand Council itself works in the Mi B universe. Agent K said in the first movie they made a treaty to be a neutral planet, which implies SOME sort of overall governing body for at least a good chunk of the aliens. The Mi B learned their lesson about 'retiring' Agents in the manner they used to after Mi B 2, so when Agent J retired, he wasn't neuralized into forgetting everything ... he just moved into a new, less stressful field of work, with appropriate (if false) paper trail.
Cobra Bubbles really is retired from the CIA as he claims, but he'd been since been picked up by SHIELDHey, Disney owns Marvel now, and another Disney Channel Animated Original has had a Marvel crossover of their own. So why not?