Lu is a young mermaid, or ningyo, who lives in the waters near Hinashi Town. She has a joyful and curious nature, and she loves music and dancing more than anything else. Her most notable physical trait is her fish-like tail, which transforms into human legs whenever she hears music playing. She also has the ability to control water, shaping it into cubes or using it to move herself and others through the air. Despite her fantastical origins, Lu is vulnerable to direct sunlight, which causes her body to burst into flames, so she can only appear on land at night or under cover.

Lu's background is marked by personal tragedy: her mother was killed by a ship, and she lives with her father, who is fiercely protective of her. This loss has shaped her, but she does not dwell in sorrow. Instead, she approaches the human world with wide-eyed wonder and a childlike innocence. She is easily captivated by everyday sights on land and is immensely curious about the people and objects she encounters. Her primary motivation is a simple and genuine desire to connect with others and to be liked, which drives her to seek out friendship and share her joy through music.

Within the story, Lu serves as a catalyst for change in the life of the protagonist, Kai Ashimoto. When Kai and his friends form a band and practice on Merfolk Island, Lu is drawn to their music and soon becomes part of their group. Her uninhibited singing and dancing help Kai open up emotionally, allowing him to express feelings he had long kept bottled up. As news of her existence spreads, Lu becomes a local celebrity, and her popularity inspires the reopening of an old merfolk-themed amusement park. However, her growing fame also stirs tension between the merfolk and the townspeople, who hold ancient superstitions that mermaids bring disaster. Lu is at the center of this conflict, and her presence ultimately forces both communities to confront their fears and prejudices.

Lu's key relationships include her bond with Kai, which deepens from initial fascination into a sincere affection. She also forms ties with Kai's friends, Yuho and Kunio, who accept her into their band. Her relationship with her father is one of mutual care and protection; he risks his own safety to save her when she is threatened by the townspeople. These relationships anchor her emotional journey throughout the film.

Over the course of the narrative, Lu experiences growth in her understanding of the human world and its complexities. While she remains essentially innocent and good-hearted, she learns about jealousy, fear, and the power of forgiveness. When the town is endangered by a curse triggered by her father's rescue attempt, Lu participates in the effort to save everyone, demonstrating that her presence is not a threat but a gift. In the resolution, she and Kai confess their love for each other before she must return to the sea, suggesting that their connection will endure despite their separation.

Lu's most notable abilities include the transformation of her tail into legs through music, her water manipulation, and her talent for singing and dancing, which has a contagious effect on those around her, often making them join in joyful movement. Her childlike personality, combined with her magical powers and her role as a bridge between two worlds, makes her a memorable and central figure in the story.