Personally, I'm a fan of Super Mario Galaxy 2's Mario shadow. A shadow that's always in the same spot below the character, like a blob shadow, but it also reflects character movement. It's not just a blob. Allows for platforming accuracy and still looks decent. It's not realistic, I know, but it still looks relatively normal and it works well. That's the important bit.
This would mean getting rid of dynamic shadows on Yooka & Laylee. It's a tough call, but I think this would be a great compromise.