This is a film for kids and their parents, and like a lot of “whole family” entertainment (think Merrie Melodies) not all the jokes are aimed at children - they won’t get them. Here’s a perfectly clean example from the film: A poster advertises the town of Cheesebridge as “A Gouda Place to Live” That pun is way over most kids’ heads.
I do recognize your concerns (which I really shouldn’t have to say in every post!), and I did already offer a way to explain the villain that you could give to a child before seeing the film. Children often need to be told how to separate fantasy from reality - for all kinds of reasons - so it’s not a bad idea to explain who the villain is and just say that no one will let him into parties so he found a way to sneak in using a disguise. He could just as easily be a clown.
Stereotypes exist, but they aren’t always what they seem. In Gentlemen Prefer Blondes, Monroe’s character is a “dumb blonde” who really isn’t - she’s just living up to society’s expectations. If I refused to see every film that had a “dumb blonde” in it, I would have missed some of Hollywood’s greatest classics - and some blondes being anything other than dumb.
This character isn’t designed to be trans. In fact, he’s more like a hybrid of the kid catcher from Chitty Chitty Bang Bang and an homage to Monty Python. It may help you to know that Eddie Izzard cited his main comedy role model as Monty Python. Cross dressing for humorous effect (for both sexes) is a British comedy tradition.
One last thing, and I am saying this to be helpful: At this point, you are on the brink of revealing far too much about a current, recent release film - that some people may want to see, this thread wasn’t originally about the topic that has taken it over - without using spoiler tags. Just go here to find out how to use them.