>>716183280
>Why does he look like an alien
He is a shumi, a race of intelligent demi-human creatures, you can find most of them in a secret village (with the stupid NPC blocking a draw point and demanding cash from you). Very little lore about them as far as I remember so it's safe to assume "a sorceress did it" is the answer to all your potential questions.
>lives hidden in the server room
Because he is fat and really only cares about the money. It's Cid's job to deal with the kids.

>>716184019
>Doesnt he literally get killed by the party or am I misremembering?
No, he just turns into a cocoon because that's something Shumis do for some reason (they can evolve, or fail to, like pokemons).