It's mostly carried by a gimmick, but that's fine, because it works. To restate the basics, Yokai Watch is about a boy (Keita-kun) whose watch summons yokai. Here, a 300-metre whale flies down from the sky and hovers above the city... whereupon the film changes from anime to live-action. Suddenly Keita is being represented by a child actor, while his yokai friends are goofy CGI creations.
The best thing about this is that they can tell the difference. They think reality means "hand-drawn animation" and Keita's horrified to find himself looking photorealistic. He calls our reality "the pore world" because his skin now has them. He also doesn't recognise his parents. He's shocked on seeing them and asks if they really are his mother and father. Yes, they are. Keita and his ghost friend Whisper then go outside, see the live-action equivalents of Keita's friends and go nuts again. They think Fumi-chan is sexy, but we're talking about eleven-year-olds. Nope. However, the producers have for laughs cast a 30-year-old as Kuma (presumably the same age as the other children), so our heroes are correct when they note in astonishment that he looks like an old bloke.
A koala with a shiny nose can transform everything back into anime. We swap back and forth. "This phenomenon was definitely the work of a yokai!" says someone who doesn't mind stating the obvious.
None of this is complicated, but it's a laugh. That cat yokai petrifying in shock was funny, as was the fart attack. Also, Lord Enma and Nurarihyon (who together rule all yokai) are now pretty boy models who can't be dragged away from their mirrors. They also can't stop themselves dancing when the magic urge takes them.
Might this film be about changing yourself and becoming something different? The baddie's doing all this because she hates her physical condition and wants to transform the world instead. (There will be a kiddie-friendly moral when this is resolved, because she only really wanted to dance.) People turn into live mackerel flapping on the ground, or in one case an octopus. Whisper becomes a fish too, although with him this doesn't make much difference. Robonyan deliberately eats a transformation item, assuming that robots would be okay. Nope.
I enjoyed this one. There's not that much to it beyond "reality vs. anime" transformations, but they're having so much fun with that that I was entertained throughout. The film also has a theme, a decent antagonist and a surprisingly good child actor in the lead role. His name's Ryouka Minamide and he's still in the business today, getting acting work at the age of twenty. I'm not surprised. Honestly and truly, this film is good.