In the game, it forms a certain portion of Bog Easy. This is where Ghost Ian teaches the Spatters to be nice with everyone, with an exception to Mickey, because of defeating the Shadow Blot. The Alley also includes Club 13, a minor plot point in the story as one of the places Gremlin Prescott was in. The main area of Blot Alley is called "Blotling Square" where there are clothes hanging on the roofs and a lot of red-and-white squared tables.
Blot Alley could be inspired by the rejected Disneyland area Edison Square. That is because the 19th century buildings and the statue of a Spatter that resembles the one of Thomas Edison planned for Edison Square. Also if you look closely in the photos below, you'll see a bell similar to the one in National Treasure.
If the toon floor is thinned, the inert parts will break apart and sink into the thinner.
Blot Alley is also styled to have iconic elements from the Disney movie, Lady and the Tramp.
Getting to the other end without the bell ringing is made very difficult as Oswald's AI often leads him to attack the Blotlings.