I saw this final paragraph from Roger Ebert's review of Fantastic Mr. Fox, and I thought it perfectly aligned with my thoughts on Hayao Miyazaki's films like Ponyo. This is a paragraph that should be framed and hung in the wall of writers and storytellers everywhere:
Like the hero of "Willy Wonka and the Chocolate Factory," also based on one of his books, the creatures of Dahl's valley seem to know more than they're letting on; perhaps even secrets we don't much want to know. Children, especially, will find things they don't understand, and things that scare them. Excellent. A good story for children should suggest a hidden dimension, and that dimension of course is the lifetime still ahead of them. Six is a little early for a movie to suggest to kids that the case is closed. Oh, what if the kids start crying about words they don't know? -- Mommy, Mommy! What's creme brulee?" Show them, for goodness sake. They'll thank you for it. Take my word on this.
The Hidden Dimension. I think that's a key factor in great storytelling. It's kind of like Super Mario Brothers, with coin boxes buried in the walls and hidden pipes just off the screen. Not everything needs to be shown or explained away. The mystery itself is sufficient. I think this was a point of contention for many Western viewers where Ponyo was concerned, but I think it's a great movie because of it.