After the death of her father, Momo and her mother move back to the island of Shio (Japan) where her mother grew up to start life over away from Tokyo. While her mother is happy to see her family and old friends again, Momo has now lost both her father and her old life and is very unhappy about everything. And when she realizes that they're being stalked by a trio of troublesome supernatural creatures she becomes even unhappier still....
To get this out of the way, it's hard for me to think about this movie and to not compare it to Wolf Children. This is partially for reasons beyond the control for both movies, I saw them at the same place* and saw Letter to Momo the night I wrote my Wolf Children review. The fact that they're both family films didn't help me but even if I hadn't seen them so close together I think I would still rank Letter to Momo more favorably than Wolf Children. Both of these movies are trying to give the audience a very specific, emotional response to the film which is of course true for all stories but more relevant for some stories than others; here both movies are trying to convey this heart-warming, uplifting, there-is-hope-and-happiness-even-after-tragedy tone and this movie is simply more believable. The characters are better fleshed out, the story has a better grasp about what point of view should be used when, and ultimately it was a really strong film for it.
On the characters, since that is easily the most important aspect of this film, I thought that the story nailed Momo's attitude towards all the upheaval in her life. She's grumpy, withdrawn, a little whiny, and clearly unhappy but it's never exaggerated so much that she becomes a pain to watch. It fits in well with her other character traits, she's a bit shy around the kids of Shio but her determination and energy when dealing with the annoying supernatural trio after they've pushed her beyond her shyness works well too. And when we see what her final argument with her father was about it's heartbreaking, having a character regret something petty they said is an old cliche but Momo's situation feels much more realistic and reflective of her whole character and very emotional. Momo is clearly the main character of this story, with her mother as an important but ultimately a supporting character, but the story also manages to flesh out a number of other side characters which in the end made the whole story more believable. Her mother is a great character, she's clearly happy to see some parts of her old life again and shows this without belittling the life she chose in Tokyo (another old cliche). The story made it clear to the viewer that she too was sad in many ways long before Momo articulated it in so many words for the younger members of the audience.
I agree with quite a few other reviewers that the supernatural aspects of the movie were by far the weakest part but they're tied deeply enough into the story that I can't really argue that they should have been completely removed. As mentioned earlier, Momo (and her mother) are being followed by a trio of supernatural creatures once they get to the island and only Momo can see them which does cause some conflict but only some of it is amusing. The creatures themselves also cause trouble and I was afraid the movie was going to fall into the old "but mom I didn't do this, these things you can't see did all the bad stuff!" cliche. The story very, very narrowly averts it and with all of the conflicts the movie already has it really didn't need to add that one in. But the climax of the film comes from their actions so you can't just cut them out entirely, although I will admit I wasn't that fond of the climax and had also hoped that the story wasn't going in the direction of "big, external event prompts characters to have small, internal change" but this is a movie for kids and families after all, clearly writers and directors think they won't understand the story if something grand doesn't happen. I think that if the supernatural elements had been toned down and the climax was less dramatic it would have remained more tonally consistent as a whole (you might even be able to completely cut it out and just focus on the ending scene which was perfect). I am curious why those elements were kept in the story at all since they do feel just slightly different in tone from the rest of the story. This movie was in production for about seven years and I wonder if it simply took seven years to animate or if there was a lot of wrangling over the script and that these two elements came from different iterations of the film.
To briefly touch on how the film looks, while it's pretty it's not an especially stunning work visually. The character designs tend towards the simple, the supernatural creatures are purposefully ugly, and the island scenes, while nice and different from what you usually see, weren't absolutely fantastic, top-notch stunning. I'm perfectly fine with that, it's not as if every live action film I see has the best visuals ever, and the movie certainly looked charming enough. I saw the Japanese dub of the film and everyone sounded fine to me, I believe ANN's review of the movie talks about the English dub as well. With all of that in mind, I highly recommend seeing this movie, despite it's flaws it's a really great work and can easily be enjoyed as a family film for just about any age. Sadly I don't believe it's streaming anywhere online but GKids (the same group which did the theater distribution for Princess Kaguya and a number of other anime films recently) has put it out on DVD and BR in the US.
*the JICC and if anyone is in the DC metro area I highly recommend signing up for their emails, they do a lot of free movie showing and other events