I think that Disney used cheap labour, rather than PC's - it was the 1930's after all. The usual technique was to get his best artists to do the key frames, and then have the underlings do the inbetweening.
I'm not sure that the 'morphed' version is actually better than the original - it seems to result in a loss of detail, and looks artificial to me.
As for Walt himself, the claim that he was cryogenically frozen seems to be an urban myth:
http://www.snopes.com/disney/waltdisn/frozen.asp.