Yes, this film is absolutely on-topic
As you've pointed out, Coco isn't a faithful retelling of a specific religious story (in the manner of The Passion of the Christ) it's actually a jumbled mish-mash of a variety of different cultures and themes from more than a thousand years of history including some elements that are purely creations of the filmmakers.
Ghosts, magic, spirit-forms and fantastical beasts are all combined into a Mexican-(but also Mayan- and Aztec-)themed extravaganza.
The film itself is billed by Pixar as containing magic
Despite his family’s baffling generations-old ban on music, Miguel
(voice of newcomer Anthony Gonzalez) dreams of becoming an
accomplished musician like his idol, Ernesto de la Cruz (voice of
Benjamin Bratt). Desperate to prove his talent, Miguel finds himself
magically transported to the stunning and colorful Land of the Dead
following a mysterious chain of events. Along the way, he meets
charming trickster Hector (voice of Gael García Bernal), and together,
they set off on an extraordinary journey to unlock the real story
behind Miguel's family history.
CHARACTER & TALENT LINEUP REVEALED
MEET THE EXTENDED FAMILY FROM DISNEY•PIXAR’S “COCO”
And that the setting is fantastical
In visualizing the Land of the Dead, Feinberg says the challenge to
the team was to “make this world something fantastical that no one’s
ever seen.” The land, inspired in part by the hilly Mexican town of
Guanajuato located northwest of Mexico City, towers high above the
ground. It is always nighttime in the Land of Dead, necessitating a
staggering number of light sources to illuminate a scene that includes
street lights, lights for the plazas, architectural lighting on bigger
buildings, blue lights along the trolley tracks, pinlights that
outline the edges of many buildings, headlights on the moving
vehicles, lights on the construction cranes and much more.
NEWS: Disney•Pixar’s ‘Coco’ Uses Innovative Visual Effects to Celebrate Family and Tradition