Raggedy Ann & Andy: A Musical Adventure/WMG

The Greedy was part of an Aborted Arc about the Seven Deadly Sins
They got as far as Gluttony before realizing 1. they didn't know where they were going with that idea, 2. it would make the movie way too long, and 3. they didn't know how to get Lust past the radar. The horrifying taffy monster stayed because, hey, why waste perfectly Deranged Animation?
 * Babette might have originally been intended to represent Lust (just look at the her depiction in the pirate ship scene near the end, and listen to the song again).
 * The "Babette" part of the theory doesn't work because she inspires lust; she is not herself lustful.
 * Still, it's easy to see why some would think they were going that way. King Koo-Koo could be said to represent pride.

This is all just a drug trip hallucinated by a disgruntled animator.
It explains everything. The last thing the animator saw was a Raggedy Ann doll.

The Camel with the Wrinkled Knees is suicidal, and his hallucinations are visions of a happy, shiny afterlife beckoning him to join them.
Makes sense considering the Camel's default demeanor and disregard for his own well-being whilst chasing the imaginary camels in the sky.

The Greedy is actually another escaped subject of the same tests Tetsuo was subjected to.
A taffy monster? That's just his cover story.

The movie is just Marcella playing with her toys.
The whole thing is just the fantasy of an imaginative seven-year-old girl.