Skull and brain size certainly aren't any indication of intelligence. Racoons have far greater intelligence than say cattle in general despite being far smaller in terms of cranial capacity and brain size. It's not what you've got; it's how you use it.
In regards to the effect, it looks pretty darn good. I'd've given him a more pronounced eyebrow like the animated Edoans have, but it's certainly intriguing.
Will this set back productions of the episodes, though, since bridge scenes with Arex would have to be CGIed?