The characters themselves are clearly exaggerated, larger-than-life figures. On a stage in front of possibly hundreds it no doubt helps to get a point or gesture across, but also serves to emphasize a character's personality and stage presence. My guess is that it's difficult to slip smaller things into a production, so everything must be noticeable. And if it's not meant to be noticeable, what then? Make everything else more noticeable! Like playing everything really loudly so when suddenly the quiet parts come in, they contrast makes them stick out more. Dynamics!
Also, costumes, costumes are a quick way to identify a character. Who they are, what they are, and what will happen to them can be clued in by looking at their outfits. Obviously no one's going to go all Sherlock on them and zero in on mustard on the sleeve, coffee stains on the collar, dog hair on the trousers and the faint waft of laundry detergent signaling this is that, and that is this, etc. but a woman wearing a pink frilled dress is going to register as a flippant, feminine sort who will probably trill at you and constantly be fixing her hair. A tall brooding sort with dark eyes, hair, coat, and shoes will either set off the serialkiller! bell or the other tropes surrounding those types. Yes, it is stereotyping, and no, it's most often not a good thing when regarding real people, but it is the basic thought process that goes on in ones mind. So it would seem that exaggerated costumes help this!
Eccentric and exaggerated, that is the face of a musical, it would seem.
So does that mean if a musical were a person, the plot would be the spine, the songs the muscle, the FWOOSH that makes up the props and costumes and fance the face? Then what's the rest?
I do believe we have a third essential question.
Essential Questions:
1) Are characters relatable when they are stretched and exaggerated?
2) What if it's got a more serious tone? Must things be kept exaggerated or can you normalise your characters?
3) If a musical were a person, what would make up the different parts of it?