WMG / Super Mario 64

The paintings were painted with the magic paintbrush from Super Mario Sunshine
It would explain how Mario is able to teleport to another place when he enters one.

The aliens in Battle: Los Angeles use a health bar like Mario
One alien is shot up and falls into a pool. He then comes back up at full health - just like Mario 64, his breath bar is his health bar!

Wet-Dry World are the remains of a lost civilization
Closer inspection of the background skybox reveals that the city is submerged under water, this fits into the gameplay aspect of controlling the water levels of the world. Also notice how it's completely deserted, save some pond skaters and wind up toys. After all, a town that can be completely submerged in water isn't really habitable for land living creatures. However, the place isn't suited for aquatic creatures either, seeing as how it can just as easily be drained. This makes the pond skaters the only living beings of the world, because it is an ideal habitat for them. Perhaps this also accounts for their huge size? What we have is a level that is a deserted city of empty buildings, void of inhabitants, which can be flooded at will, complete with eerie music. When you put it like that it seems very likely that this was intentional.

The ship in Jolly Roger's Bay was originally one of Bowser's flying ships until shot down/crashed above/into the bay.
How else would the ship be able to get inside a clearly closed-off area?

Bowser forgot about Bob-omb Battlefield.
Or Bowser left it open in hopes that Mario would get killed there. Why else was that door left unlocked?
  • The latter guess is basically confirmed. The Bob-omb King says he was the one to capture Mario.

The Bob-omb Buddies are reformed Rob-ombs.

The toxic haze in the hazy maze is, in fact, chlorine.
There's no mistaking that yellowish green poison gas. Though, there may be other, more obscure yellowish green poison gases out there that could've played the toxic haze in the original game...

The Trees right outside the playable area of Big Boo's Haunt
They're actually grass.

The Endless Staircase is an escalator.
It only travels downward, and it always moves at the same speed as Mario's running when he tries to go up the escalator. The walls to the left and right are part of the escalator too. This is why no matter how much you run up, it's just a short distance down. (This is what I assumed when I was little and played it, in any case.)

The music composer took cues from Koneko Monogatari
Known in America as The Adventures of Milo and Otis, the Dire Dire Docks theme has some rifts that sound similar to the film's recurring theme, "Watage No Hara".
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