It's no secret that the Nintendo characters on CD-i get a lot of attention on Youtube because of the art-style and the fact people can easily alter and make movies of them that they reckon to be funny (in a bad way). It's also no secret that we at Interactive Dreams don't feel this way and in fact value the history behind it and keep the limitations in mind. These types of cutscenes are actually used in quite some CD-i games, most notably in Hotel Mario and Link: Faces of Evil and Zelda: Wand of Gamelon, but also in other CD-i titles like Pyramid Adventures, the Tim & Bear series and several kids CD-i titles by Sidewalk Studios. The general feeling about these cutscenes, however, is negative.
Those statements we hear more often, but keep in mind this was the very start of 'full motion video' and Philips tried to find a way to offer this even before the DVC was ready and specified: The animation technique they used in a lot of CD-i titles like Tim & Bear, Hotel Mario and many others is in principle the same, it offers FMV on the limited CD-i hardware but also a more cheesy simplistic look to what have been drawn. At the time, I was impressed with what was possible (mind you our computer at that time was a 286 pc and a NES).
Mimicking a cartoon style in a digital way was new and it showed the purpose of full motion video was (while handicapped) possible on a base-case CD-i player. Later, companies like TripMedia proved there was a lot more possible as we've seen in the amazing graphics of Burn:Cycle (which also doesn't require a DVC). Other examples of what is possible on CD-i without the Digital Video Cartridge are shown in Kether and Rise of the Robots.