I was a dork and used to think he was an elf...my personal theory is it's the mystic's work, but others think Magus simply altered his face with magic.

That could certainly be true, they half assed many other things. I have several comic jokes I've found that mock the fact you can walk into Guardia castle with Magus in the party and have everyone including the royalty ignoring him. Prolly no time to add all that extra dialogue? I know originally Schala was supposed to join your party, so maybe Magus was like Vegeta in DBZ where Akira Toriyama got death threats and stuff if he killed people's favorite character. It happens in Japan.