The protagonist of Drill Dozer, Jill, is a heroic burglar who breaks into museums and fights against police officers. This detail is not mentioned in any of the game's US promotional materials, with a press release for the game simply calling Jill "not a bad girl" and claiming she destroys so many things because "she just has some issues", likely to avoid controversy.

The choice of a young girl protagonist in Drill Dozer was decided by Ken Sugimori as he felt the juxtaposition of a "frail" character would be more interesting than the sort of masculine character that would typically be depicted in mech-suit and vehicle-themed media. Concept art shows a tokusatsu-style, presumably-male character in the same vein as Game Freak's previous title Pulseman with a drill for an arm, before it was chosen to have a character piloting a mech instead.

Character designer Hironobu Yoshida was opposed to this decision because he found women to be hard to draw, and added thick, boyish eyebrows to Jill's design as a subtle form of protest.

Jill's noticeably exaggerated hairstyle was derived from the appearance of a roll cake, when Yoshida was eating one at home. He asked his wife to prepare two more roll cakes and placed them atop a sketch of Jill's concept art. Yoshida noted that other characters in the game were based on foods, with the fish boss Fuguru being based on a fugu fish, and one unspecified character being designed to appear like an onion (likely Gearmo, whose long white hair strongly resembles a negi, an onion native to China that has been cultivated in Japan).

In a Game Freak behind-the-scenes video, an unused design for Jill is shown. This version of the character lacks zippers, has uncurled ponytails that are even bigger than Jill's already large exaggerated hairstyle, wears knee-high heeled boots, has one large pocket on her hoodie-dress instead of two, lacks her drill-shaped hair tuft, wears large white ponytail holders with rabbit ears, and appears to have a single fang and wear long white gloves instead of short yellow gloves.

The US version of Drill Dozer modifies some of the unlockable generic costumes to reference (or further emphasize existing references to) different Game Freak and Nintendo games:

• A schoolgirl outfit was swapped for an outfit of Leaf from Pokémon FireRed and LeafGreen.
• A nurse outfit was given extra details to reference Click Medic.
• A futuristic outfit was replaced with a Pulseman outfit.
• Costumes already based on Mario and Mendel Palace being given extra details from their source material.

Despite references to Click Medic and Pulseman being added in the US version, those games had not received US releases at that point. These changes were reverted for the European version of the game.

An internal "last updated" date in the files of Drill Dozer shows that the European localizations of the game were finished in 2006, 10 years before their first release on the Wii U Virtual Console.

When a US release for Drill Dozer was first announced, it was titled Screw Breaker, a shortened version of its Japanese title Screw Breaker: Goushin Dorirurero. Other pre-release content reveals other localised character names that were changed before release, with the Drill Dozer originally being named "Breakall Drillbot" and the Skullker gang being called the "Skull Rollers".

Drill Dozer marked the first time Ken Sugimori directed a game since Pulseman eleven years earlier in 1994. In a 2005 Nintendo Dream interview, he revealed that due to the increasing amount of content and collaboration required in making modern games and much of Game Freak's newer staff only having experience in the Pokémon series, he was prompted to place his full trust in the younger staff for most of the gameplay development as he realized he was not as young as he used to be. Sugimori scaled back his efforts to focus on drawing art for the game while character designs were done by Hironobu Yoshida. He also noted that Drill Dozer gave him an opportunity incorporate ten years worth of ideas from previous games that went unused due to memory constraints or deadlines, and felt they succeeded, which gave him a sense of relief.

In the files of Drill Dozer, a sprite can be found of an "S button", a button that has never existed on Nintendo platforms. It was most likely an attempt at creating a shorthand for Start or Select, as the circular shape of the button resembles the Game Boy Advance, Game Boy Advance SP, and Nintendo GameCube's Start buttons, and the written S was reused for the final game's Start button sprite seen when cracking locks. However, it does not resemble either the Game Boy Micro nor Nintendo DS' Start buttons, both of which were available by the time Drill Dozer released, which alongside "S" being shared as two button's acronyms likely led to the sprite being replaced with one that reads out the entire name of the button and resembles the Start and Select buttons seen on the Micro and DS.