Yeah they really fucked the plot of this movie. Its really fucking gross.
Plot
On the planet Turo, Dr. Jumba Jookiba is convicted by the United Galactic Federation of illegal genetic experimentation for creating Experiment 626, an aggressive and near-indestructible creature with advanced learning capabilities. Jumba is found guilty and imprisoned, while 626 is sentenced to exile for his destructive behavior. However, 626 escapes by stealing a police cruiser and using its hyperdrive to reach planet Earth, crashing in the Hawaiian island of Kaua'i. The Grand Councilwoman offers Jumba his freedom if he captures 626, pairing him with deputized "Earth expert" Agent Pleakley. 626 crashes near a wedding reception and is run over by a tourist trolley before being taken to an animal shelter.
A Hawaiian girl named Lilo Pelekai is expelled from hula school for pushing her bully Mertle off stage due to frustration over her sister Nani's absence. Their social worker, Mrs. Kekoa, visits and finds Nani unfit to care for them, demanding she complete her tasks in a week.
The next day, hearing Lilo wants a friend, neighbor Tūtū takes Lilo to the animal shelter where 626 is kept. Realizing Jumba and Pleakley are after him, 626 impersonates a dog and allows Lilo to adopt him for his protection. Nani takes them to her resort lūʻau job with her friend David Kawena. Lilo names 626 "Stitch" after Nani comments on having to stitch a car seat he tore. They enjoy the resort, but Stitch accidentally causes a table fire, leading to Nani's dismissal.
Nani is visited by Kekoa and Cobra Bubbles, a CIA agent who is investigating Stitch's arrival while posing as a social worker. Kekoa demands that Nani find new employment immediately. Despite interviews, she is rejected due to Lilo and Stitch's antics. Lilo helps Nani get hired as a surfing instructor, and they enjoy surfing after her first shift. Meanwhile, Jumba and Pleakley unsuccessfully try to capture Stitch while jet skiing, causing the Pelekais and Stitch to wipe out, nearly drowning Lilo as Stitch sinks.
After Lilo's recovery, Kekoa tells Nani the Hawaiian government can cover the health insurance costs if she relinquishes her guardianship, which she reluctantly agrees to. As the sisters share one last night together, Stitch reflects on his actions and solemnly returns to the animal shelter alone. Meanwhile, the Grand Councilwoman, frustrated with Jumba's failure to capture Stitch, cancels their deal and orders Pleakley to return Jumba to prison. However, Jumba decides to capture Stitch without Pleakley.
Kekoa and Bubbles arrive the next morning to find that Lilo has escaped her bedroom. They and Nani start searching for her. Lilo finds Stitch at the shelter, but Jumba arrives to recapture Stitch. They escape to the Pelekais' home and fight Jumba, destroying their house. During the fight, Jumba reveals that Stitch used Lilo for his protection, leading to guilt-ridden Stitch's surrender.
Jumba takes Stitch aboard his spaceship using a portal-generating gun, intending to erase Stitch's newfound empathy. However, Lilo sneaks aboard and frees Stitch, and they eject Jumba from the ship. The ship crashes into the ocean, trapping Lilo and Stitch underwater. Stitch rescues her, but as he cannot swim to the surface, he releases her to let her emerge and drowns.
Nani and David rescue Lilo, but she refuses to leave Stitch. David returns Lilo to shore while Nani swims back to get Stitch from the ocean floor. They reach shore, but Stitch remains motionless. After Bubbles finds Pleakley and they rejoin the group, David revives Stitch by jump-starting his lungs. Shortly after, the Grand Councilwoman arrives and re-arrests Jumba. After seeing Stitch's change of heart, she decides to let Stitch exile on Earth with his newfound 'ohana.
As the Pelekais, Stitch, and company return home, Kekoa tells Nani she can give Lilo's guardianship to David and Tūtū, allowing her to stay home. The 'ohana then repairs the house and lives happily together. Nani, now attending the University of California, San Diego to study marine biology, uses Jumba's portal gun to visit Lilo and Stitch back on Kaua'i.
They remove the cop as a bad guy. They make Jumba the bad guy. The cop is the bad guy because the Galactic Federation is ALSO the bad guy. They do not want to understand Stich, and simply want to kill him. Its the cops job to get that done. He is alien to them (ironic) and want him gone. He is presented as a savage.
On the flip side, its the STATE that is the bad guy in Lilos life. She is a native, in a colonial outpost. Her only care giver is her sister. The state is threatening to destroy this already struggling and broken family.
Stich causes chaos in the their life making it harder on Nani, and the threat of loosing lilo becomes real as a result. They have a somber moment where Nani sings Aloha ʻOe to Lilo which was written and composed by Queen Liliʻuokalani, the last queen of Hawaii, while she was imprisoned in 'Iolani Palace for trying to restore her monarchy. It is widely regarded as a lament for the loss of her country. So it is sung, in this moment, as a farewell to Lilo, mirroring that mournful moment of Hawaii history..
The galactic state wants to remove stich from Lilo. The colonial state wants to remove Nani from Lilo.
All any of them want is to be a family. Something colonial states regularly seek to destroy as part of their colonial project, destroying the "nontraditional family", which Lilos family fully represents. Jumba has a change of heart, and aids in saving Lilo and Stich from the cop.
In the end, their family is restored, and even protected.
In the new one Nani gives up custody of Lilo to her friend so she can live in California to learn Marine Biologist... Which is like the total antithesis of the point of the original movie!