According to Bruce Timm, the reason they did not use Clayface much is because he was too expensive to animate, as well as too difficult to come up with a good story for. Also, Eric Radomski came up with the idea due to the fans demanding another Clayface episode, after the success of Feat of Clay: Part I (1992)/Feat of Clay: Part II (1992)
The Clayface character shared the attributes of the first two Clayface characters in comics (the acting profession of #1 and the name and powers of #2). In this episode, he adopts the characteristic of Clayface III, Preston Payne. In this story, Matt Hagen/Clayface wears a special suit to hold his body together. In the comics, Preston Payne/Clayface had to wear an exoskeleton suit to contain his collapsing flesh.
The episode also contains several references to the movie making industry, given Clayface's background as an actor: Stella's surname, Bates, as well as past occupation is a homage to Norman Bates, the psychotic motel owner played by Anthony Perkins in Psycho (1960). Batman mentions she once owned a motel in the past, akin to the Bates Motel (2013), although Clayface is presented here as the psychopath and not Stella. When he is placed in the support suit that gives him structure, Clayface looks similar to an Oscar statuette. Towards the end, Clayface yells "STELLA!" a la Marlon Brando's Stanley Kowalski in A Streetcar Named Desire (1951). The movie Stella watches, which Alfred later identifies as The Dark Interlude, has a plot that is very similar to that of Dark Victory (1939). Also, when The Dark Interlude finishes, the Warner Bros. logo is shown with the words "The End" without any end credits, which was how film studios ended their films during the Golden Age of Hollywood. During the final confrontation, Clayface uses several movie-related terms, such as "You've upstaged me for the last time", "Time to bring down the curtain" and "Time for your final bow" when referring to how Batman has interfered with his plans and how he will kill him for it. Clayface also says "Curtain's going down" just before falling to his death. The name of the isotope, Mp40, is a likely reference to the MP 40 sub-machine gun, a weapon first used in World War II and that has been seen in numerous war films. The machine that Stella uses to place Clayface in his plastic coating vaguely resembles the table where Victor Frankenstein creates his creature, as seen in Frankenstein (1931) by Universal Pictures.
Clayface refuses Batman's help to become normal again, yet by stealing the Mp40 canister from Wayne Biomedical, he unknowingly accepts it.