Plot ideas

I've not changed it...

My definition of Lycans in terms of GS is like the Werewolves of Garoh (though, this applies to any animal transformation). They seem human, but can turn into a were-form, possibly at will (or forcibly during nights of the full moon).

You said it quite well, too. It's GENETIC - you have to be born a Lycan. Plus, since Luna is believed to be the floating land of the Anemos, one can assume that they found a way to keep alchemy alive - otherwise, they'd certainly not be floating! As such, you could say that though the power of Alchemy doesn't compare to that of the Golden Sun, it's enough to affect the people and lands beneath it. As such, you could say that a SIDE EFFECT of the alchemy at Luna could be the effects on the Lycanthropes.