The game-over skull and the Demons are avatars of the same entity
It's implied that Dracan released something which single-handedly turned the mansion into a hellhouse, with dominion over all the living and undead who remain there for a prolonged time. In the endgame, the demon which tries to possess your sister is determined to be the "source" of all the evil things in the house, but in the Ruby game-over, the blood-red skull which appears in the death screens is described as "your new master." Surely there is such a connection between these two figures. You're actually naked.
In Shadowgate, there are many references to your (WORTHLESS) armor, indicating you're at least wearing something. In Déjà Vu (1985), the first has you get your coat, and you begin the second game Naked on Arrival and have to put on clothes to continue through the game. Here? Your inventory starts EMPTY. You don't carry a wallet or license, and many parts of the house are quite chilly. Logically, based off the other MacVenture series, that means you are complete starkers throughout the game. So why are you driving nude? Well, don't ask.