No, you aren't going crazy. Yes, that picture is accurate. That is Mario, and he is indeed fighting an MS Paint shit monster. I should add that a MIDI rendition of The Phantom Menace battle music is played throughout this scenario. I should also add that this boss fight is broken and obtuse, and so far I can't figure out how to pass it. I think this segment encapsulates the experience of Mario's Adventure for me, and is pretty fucking hilarious. Super Marco (Mario's autistic cousin) is also entertaining in the same MST3K kind of way, and is tantamount to playing a platformer made by Andy Warhol circa 1986. Today is an exploration of amateur design, a meditation on the earnest and unintended Shit Games out there.
Mario's Adventure is a parody game made by Noyb when he was twelve, and his age shows. Graphics are either ripped from Mario games or drawn in MS Paint, and the music is Super Mario 64 tunes mixed with weird MIDI compositions. Noyb does the voiceovers himself and they're hilarious, in an ear-raping absurdist sort of way. I can only reach the sixth level, but within this half dozen I've played every bad design choice conceivable. Vague objectives? Check. Unresponsive and unintuitive controls? Check. Requisite shitty underwater and forced-scroll levels? Check and check. In one level you even have to replay two boring and easy sections indefinitely (asinine dialogue and all) since you die to a poorly designed boss immediately afterward. And then you face the shit monster. It's games as seen through the lens of a pre-adolescent, an unflinching reflection of substandard gameplay cliches that 'actual' developers cling to. There's a surreal and banal story interspersed between the levels, with all of the wit of a middle-schooler who thinks South Park and fart jokes epitomize comedy. The sum of all this is the game equivalent of Manos: The Hands of Fate, and in order to enjoy the game you should approach it in this campy manner.
Virtanen Games is best known for its unorthodox, Cactus-inspired Seven Minutes. Before they created that indie gem they developed some generic platformers, of which Super Marco is one. It's less esoteric than Mario's Adventure, but just as mediocre. Like countless other homebrew games it's a pastiche of the Super Mario franchise, and is highly derivative and kind of buggy. The graphics are half quirk, half placeholder art; the music is repetitive and doesn't even loop properly, resulting in stilted transitions that make the game 'skip' like a fucked up record. The controls are floaty, but that's all right because the game is pretty easy (outside of the occasional poorly placed spike pit). Like all of the consumeristic platformers out there you collect gold trinkets -- which are useless. The culmination of all of these elements result in a decidedly B-game; the equivalent of a movie with Vincent Price or Bruce Campbell attached. It's all of the tropes and cliches of the platformer genre mashed together without any charm or smart design driving the experience. It feels like an autistic post-modern take on an ancient genre, while in truth it's just a crappy game. How punk.
Some games, like Edmund McMillen's, are punk due to their content and attitude. These games are punk through execution; sloppy and ersatz copies of the mainstream made by aspiring young 'uns. To this I say rock on, but get to your No Wave era already.