That sounds too much like a certain game called Hyrule Warriors - the title especially (and well it's made by the makers of Dynasty Warriors). But then it feels like it could be a really cool idea to ahve a hack'n'slash Klonoa à la Dynasty Warriors, but I wonder if it shouldn't have a gimmick unique to itself (reminding the player that it's still a puzzle game) to make it unique.
I'd propose "Klonoa - Dream Crusaders", but that sounds too much like a certain fanfiction I just got back into writing, lol.
The idea to control either the heroes or the villains seem cool, too, since it means we'd get to play as either Klonoa and Nightmare Klonoa, kinda like Sonic and Shadow in Sonic Adventure 2. Like that game, we could have a final story to unlock with both Klonoas fighting against Tenebrae Hue. That too would be interesting, methinks.
And hey, managing armies. That may just be the gimmick we're lookin' for. Making a hack'n'slahs a bit more strategical than usual. Since well Klonoa's not the type to rely on power alone, after all.