Yes that seem logical that it was for this project, with the success of Thriller, they should really put the project in priority, Michael couldn't have been younger so it was the moment or never, he has the good look, the good reputation, his popularity was awesome, I think Dream Away was probably also for this project, the lyrics seem very close to a Peter Pan world, the soundtrack would have been awesome.
That interesting that in 84, Captain Eo was close to be Peter Pan story, but changed to the short movie we know, he wanted Spielberg or Lucas in the short movie too, I wonder if the story of the movie would have been close to that:
mouseplanet.com
"There were also discussions about a 3-D film that might be housed in the Carousel of Progress building. That caught Jackson's interest. but he insisted that either George Lucas or Steven Spielberg be a part of the project to guarantee its quality and credibility and to “protect” him as he started to explore acting.
Imagineer Rick Rothschild drew up three different storylines. The first had Jackson as a Peter Pan-like character in a magical forest with mythological beasts and fairies. The forest would be threatened by an Ice Queen and Jackson would eventually melt her cold heart with the power of music."
According to John Barnes, Another part of me and We are here to change the world were already composed during the Pepsi commercial, 1983 should have been the beginning of his movies career, have you more info about Street Dandy or others projects in early 80's ?