I don't know if this is supposed to be a specific character, but the house lights came on and it disappeared. So we played with the light switch for a few minutes to try to get a picture, and then sat down to sing.
Once the karaoke music started flowing, the lights turned themselves off and the display came back! It twinkles and sparkles during the song, pulsing to the rhythm. It isn't animated, though. I wouldn't mind seeing more rooms like this!
I'm not sure what the name of this karaoke place is, but it is located around the corner from M's Pop Life Department Store (the lime green adult novelty shop near the station). Unfortunately, they were quite lacking in music from bands and artists we wanted to sing with, though we certainly found enough songs to entertain ourselves for the full hour.