The ethnicities of the player-controlled characters are randomly generated each playthrough, so it can happen, but it's not most probable, and when it does happen it's not done with intent.
Dysmorphia is a mental condition in which a person is preoccupied with a perceived flaw in their body. It has nothing to do with people's bodies being transformed or possessed by aliens. There is no dysmorphia in this work.
The game has a good ending and a bad ending. The bad ending, in which aliens take over the planet, is obviously sad. The good ending, in which the aliens are successfully defeated, is still somewhat bittersweet, with some emphasis on the sacrifices made in order to achieve the victory.