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Danny is a Troper today.
Think about it. At the age of nine, he's already Genre Savvy enough to hang up proverbial lampshades by the dozen. Then he goes through an adventure that's more Troperiffic than any movie he has seen so far which is impressive considering how Troperiffic the Jack Slater movies have already been until then. Now imagine him today, some 25 years old, and most likely a movie addict.
The Last Action Hero doesn't parody only action films...
The scenes set in the "real world" are actually a clever satire of Film Noir. Consider- it's almost always night and it constantly rains. The movie theater is falling apart and appears to have its doors ripped from some Gothic keep. Criminals are able to kill openly in the streets and the police never arrive. The villain manages to outwit the hero and shoot him in their final confrontation. No one even cares that Death himself walks the streets, because Danny has simply jumped from one genre pastiche to another!
- Well, the ones who saw him come out of the screen were rather scared. Everybody else probably just assumed he was some guy in a costume. On the other hand, one has to ask what difference Death's being personified in any world would make whether anyone noticed him or not. Wouldn't he just go on plying his trade the same as before, which was pretty much what he did in this movie?
Related to the previous theory: there is no "realest" world at all.
Slater believes his world is real. So does Danny. It's possible that both universes are Mutually Fictional, with Slater living in an action movie universe and Danny in a film noir universe. There is no universe that's "more real" than the others -- they simply work by different laws of fiction.
- What does that make Earth Prime (our universe)?
- A place with an Author with enough of a sense of irony/humor to build a world that could contain all genres of stories, some real and some fictional.
Benedict's plan to bring together all the villains would have failed.
Why? Who the hell is this guy to them? Why would any of them follow that guy? Why would they believe him? How could he keep them under control? And why wouldn't some of them just eat him?
- Considering how frightengly quickl Benedict figured out the rules of the real world, including how to manipulate them to his advantage I feel comfortable assuming that before he collected these guys he'd have figured out a means of control. Even King Kong is managable if you remember to stop by any place that has giant mecha.