Yes, all the above. Skrulls are an alien species that has redefined genetic engineering, to a degree that even a fully grown Skrull individual can become someone else in every manner of speaking. That includes physically, mentally (in terms of memory) and psychologically. In essence, a Skrull BECOMES the person they are masquerading as. As Rowling has indicated that Wizards and Witches are different from Muggles because of a genetic factor (i.e. the Word-From-God that Hermione did indeed have a magical ancestor), the Skrulls can also manipulate that genetic factor to recreate a body to be exactly as that body wa originally.