It also looks... really stiff. Matthew, elaborate on how it looks stiff now.
Probably partly the fault of the trailer/player. I notice Yoshi just kind of stands there throughout a lot of it while things are happening, so it might look nicer in the hands of a faster/impatient player. But his walking speed does seem weirdly slow (was there a run button in YIDS?)...
I'm tired of Nintendo putting words like "New" in game titles, it makes them sound like product instead of something artistic. Plus, it's going to be really confusing years from now when games like this appear on a Virtual Console...
I think it's a combination of things that are kinda funky.
The pre-rendered characters bring to mind Mario Vs. Donkey Kong or SMRPG, and not really in a good way. What would look neat in the mid-90's looks pretty dated today when there're much smoother and stylized ways to convey character designs in games.
Regarding the environments, it's a little tougher to elaborate on, but I'll try. The backgrounds seem overly dark, while the foregrounds are unusually bright, making them clash. Not bright like pastel (i.e. original Yoshi's Island), but like...a weird neon color that kind of distracts from the characters. The color palette doesn't really compliment itself well; dark blue and super bright green and bold orange are all kind of thrown together willy-nilly. The field area looks softer and better, but it still suffers from strangely dark backgrounds (like the hills).
Conversely, I think if this game looked like NSMBU's painting stage throughout, it'd be gorgeous. As is, it's a good idea marred by iffy artistic talent. That kind of sounds mean but I think it's what happened here.
Hm. I'm not seeing what you're seeing. The whole game looks like paint/watercolor on a canvas or something. Not seeing the "pre-rendered" look you mentioned. Still looks cool, IMO. *shrugs*