Finally, after taking pretty much forever, with the aid of @Saternoir,
we are getting somewhere in regards to removing the background.
I'm using this thread to detail the little progress we have done, so that we don't lose track of the methods.
First of:
SM - Garc A123
USUM - Garc A124
Containers format:
Garc -> 0.bin (compressed LZ11) Mini format (BL) -> various ALYTs.
The one of interest is 1.alyt.
ALYT and Mini to be extracted and recompiled using Saternoir's fork of 3DSkit.
At this point, using the garcs crash the system.
It appears repacking the 1.alyt might be the cause.
I've unpacked 0.bin, repacked it (without modifications), and compressed it, and the game works.
However, the garc made by repacking the 1.alyt (without modifications) caused crashed.