This movie isn't for kids. :)
I am thinking, that everyone in the town died and they are just in the afterlife.
The boats with people from the town going to the "hotel" is like the people's souls passing Sanzu River going to the "other side" (gate).
I also think that Lisa and Sosuke died on the road going home.
The grannies also died and are now freely and happily running in the afterlife.
In the tunnel, you will see a Jizo statue, which in Japanese, is the protector of children who have died at the young age. Soooooo?
Sosuke is dead and his soul is still in adventure.