I'll try to break this down and answer your questions.
So for some reason sloth was randomly taking over the VPS (lazy typer).
It was originally his base, and he wanted it back. Also, a space station could offer substantial strategic advantages.
Sloth randomly wanted prisoners for no apparent reason?
Cannon fodder. He planned to mutate them and force them to serve as shock troops.
He took over an entire moon to what exactly?
He needed a supply of Kreludite for his mutation process. It's only available on Kreludor, so he needed the moon. His stockpiles were sufficient for the moment, but he might need more in the future. Besides, he's a megalomaniacal villain. Trying to conquer stuff is what he does
He was doing what with the Spacefaires charm?
The Space Faerie lost the charm last time she battled Sloth. He kept it and was trying to learn how to use it.
That darn parlax is what good bad?
He could just be a traitor, he could have been brainwashed, or there might be some other reason for his actions. His motivations haven't been made entirely clear. Bet he's not dead, though.
Some random dude just lets Carla and Gorix go?
The kougra in question was one of Sloth's lieutenants, and had just endured verbal abuse and humiliation from his boss--who was doing something frivolous while his troops were in battle. He was angry enough that he didn't care if Cylara and Gorix took Sloth down, so he let them pass.
And still there is 'the resistance' which has played a very little part in anything.
The Resistance has been fighting to secure the station against a large number of well-armed troops. Also, Gorix has been acting as their agent, and has played a crucial role.
*la sigh* What did they decide to do the exact plot from back in the day? forget rewriting anything to make it more up to date and clear things up. Nope lets make this plot look like swiss cheese!
I suspect that there's more to come. Hopefully, they will fill in some of the holes.
Oh and dont forget to introduce Characters from past plots in some way but not really go into anything with them.
Werther was introduced to show the link between the current story and the events in the Lost Isle plot. The high-tech tower on the island was one of Sloth's secret experimental laboratories, and the giant petpetpets were produced by his experiments with his new mutation process.