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The flashback to Carlo spending time with his father Geppetto, especially while the latter sings his late wife's song dedicated to their son. All the while, we see Carlo and Gepetto share happy memories.
The song "My Son" becomes sweeter when one realizes this is Guillermo's own take on "My little wooden Head". As opposed to the playful song about how Disney's Geppetto saw the (then-inanimate) puppet as a novelty and play-thing, this song delves deeper in how our Gepetto felt about Carlo. It's a tender lullaby that explores how his son was his whole world, how he loved and cared for him.
Despite his somewhat self-absorbed nature, even Sebastian can't help but feel bad for Gepetto when he sees and hears him mourning his late son.
Geppetto gradually warming up to Pinocchio, to the point that when he tells the wooden boy good night, he almost calls him "my son".
When Pinocchio asks Geppetto why people are afraid of him, but they love the Christ of the church despite the fact that they are both made of wood, the latter explains that that’s a common reaction when people see something (or in this case, someone) they don’t understand or it’s unknown to them. But Geppetto immediately assures Pinocchio that someday he will be accepted for who he is eventually. In hindsight, this foreshadows Geppetto’s Character Development and his journey to accept Pinocchio, both as his son and his own person. First he understandably freaks out at the greeting of a living puppet, then he tries to mold him into Carlo because he still can’t grasp the idea that Pinocchio is an entire different being (both physically and mentally), creating a lot of strifes in their relationship, which leads the wooden boy to join the circus to prove him that he’s not a burden for him. Although, once he realizes his mistakes, he wastes no time searching for him. And finally, after escaping the Dogfish, Geppetto reconciles with Pinocchio, telling him that he loves him exactly as he is.
Before sending him off to school, Geppetto gifts Pinocchio Carlo's old school book. Pinocchio may not know what it is, but he instantly declares he loves it.
When Pinocchio is haunted by how Geppetto called him a burden, he decides to join Volpe's circus so he can give his father the earnings and provide for him. As misguided as it is, it's rather sweet that he went out of his way to help his father. And the next morning, Geppetto was apparently about to apologize to Pinocchio for calling him a "burden".
Right before Pinocchio leaves, he decides to draw the only thing he knows how to draw, a smiling sun, as a means to explain his absence to Geppetto. This is already nice, as, despite the fact that no one would be able to decipher anything from the drawing, it's the thought that counts. But also, Sebastian tries to convince him to stay and not run away during this scene, and suddenly gets distracted by just how adorable Pinocchio drawing a smiling sun is.
The relationship between Death and the Wood Sprite is that of siblings who both love each other, and are annoyed by their sibling's antics. Death in particular expresses annoyance at the Wood Sprite's casual meddling with the forces of nature, but the affection is obvious in her voice, and she certainly doesn't let her annoyance out on Pinocchio.
Pinocchio bonding with Candlewick during bed time when the latter shares what Sebastian taught him about fathers. And later, they become such fast friends that during what is essentially a game of capture the flag, they both laugh over having reached the tower first and put up both their flags.
Candlewick standing up to his father when ordered to shoot Pinocchio can count as this. Normally, Candlewick is depicted as being the Toxic Friend Influence who brings Pinocchio down to his level. But this is notably the first adaptation where Pinocchio has an influence on Candlewick. Because of him, he finds the courage to take a stand and call his father out on his abuse.
Geppetto and Sebastian bonding over their search for Pinocchio, the latter no doubt keeping the former's spirits up. For a change, Sebastian gets to be a conscience to someone else who needs it. They also bond over catching fish within the Dogfish.
Even after entering in the Dogfish, Geppetto says that he knows Pinocchio will find him because "A son knows when his father is alive.". A few days later, Pinocchio enters into the Dogfish and reunites with Geppetto.
Pinocchio coming to develop a friendship with Spazzatura, to the point they work together to sabotage Volpe's musical number for Mussolini.
Whilst inside the Dogfish, Pinocchio hearing Geppetto sing Carlo's lullaby and finding his way to him. What follows is Pinocchio and Geppetto finding each other and embracing each other so joyfully as father and son. Heck, even Spazzatura joins in the group hug, as though cementing he's found better company.
While utilizing his iconic nose-growing to make a pine tree that will bridge their escape, Pinocchio tells lies that (once his father and friends recognize the subtext) become declarations of love to them. Also, Geppetto permitting Pinocchio use his nose, as though reflecting that sometimes, obedience and permission can be good things. This may not be the first time it's used, but it's certainly framed in such a way that brings his arc full circle.
Sebastian having grown so fond of Pinocchio that when the Wood Sprite tells him he's indeed earned the one wish he was promised, he uses it to bring Pinocchio to life. Sebastian was promised the wish by the Wood Sprite if he helped guide Pinocchio to be a good person. He initially savored the idea of using such a powerful wish to do anything, including getting his memoir published. But in the end, he sees what's really important and uses it instead to bring his friend to life one last time, knowing Geppetto deserves a second chance to embrace his wooden son.
Roughly before the wooden boy revives one last time, Geppetto makes the promise that Pinocchio doesn't have to be like Carlo to be loved. To this, our hero revives at that very moment to declare he likes this idea very much, and is content to be himself, Pinocchio.
The entirety of the epilogue being about how Pinocchio and his new-found family spent their last days living their lives, together.
When Pinocchio finds Sebastian dead of old age one winter morning, he has him encased in a matchbox, which he carries in his heart to this day.
Although he ultimately dies of old age, it doesn't change that Spazzatura got to live a peaceful and gentle life with Pinocchio's collective loved ones, especially after all the abuse he previously had to put up with from Volpe and his abandonment as a baby. His tombstone reads Spazzatura, il divo del palco ("Spazzatura, the celebrity of the stage").
Fridge-Heartwarming: Even though dying one by one of old age may not sound good on paper, Pinocchio's family received the happiest outcome imaginable. As opposed to Count Volpe or the Podestà (who died violent and/or rather painful deaths), our heroes each died peacefully. In the grand scheme of things, Pinocchio's friends and loved ones died good deaths.
Sebastian believing that some day, Pinocchio will indeed taste death one last time and reunite with his friends and family in the after life. It helps that Pinocchio already knows how to break his Resurrective Immortality cycle, and Death is both friendly and willing to let him do it again.
Sebastian's final narration about how life is brief isn't just there to be poetic or thematic: it's there to reassure the audience that however long Pinocchio has before he dies proper, it will be a short wait in the grand scheme of things.
The final scene just before the credits. Sebastian’s been telling this whole story in recounting his life to the Rabbits while sitting with them at the poker table. Their response? It was a good enough life. The credits then proceed, with Sebastian finally getting to sing.
