Looks like Keith's feeling a bit intimidated by his wolf friend's respectable height difference and has decided to make up the difference.
Natani: "Feel better now?"
Keith: "Yes. Yes I do."
They're naked - mostly because I think it's funny, but also to make it easier to compare their difference in size. As for an in-story reason for their lack of decency... it isn't canon, it doesn't have to make sense!