Despite his child-like appearance, he is actually the same age as Queen Ophelia.
This article contains huge spoilers!
After the main character finished the Al Maajik part of the story, it is revealed that his child-like form is the effect of a prank-spell the Prior Dark Sultan cast on him in a battle of pranks.
Upon beating the tale of the lunares, King Erik will become an ally and can join the player's party.
When in the party King Erik uses powerful light magic as an attack. It can either be a single star, three, or an explosion that he must charge up.
Upon reaching the ranks of "Hero" and "Legend" in a life, Erik rewards the player for their achievements. The player may speak to Erik in the daytime while he is sitting on his throne to receive the rewards.
In King Erik's Chamber, you can find a picture of King Erik, blocked off by a dresser. Upon examining it, the text "Is that a portrait of what King Erik really looks like?! ...Can't get close enough to see!" However, people with a sharp eye will notice that the king is still very small looking, seems somewhat feminine, and is making a winking face.
The Prior Dark Sultan mentions that King Erik should have already found a way to break the spell, which made Erik look like a kid, and that King Erik probably wants to stay short, because of all the women call him cute.
In the cutscene following the cross on Lunares, King Erik is shown having to push up his crown as it falls across one eye. Taking this into account, it seems his crown is still the size it was before he was transformed.