Holy shit
Lilly killed Kitami's family in the car crash, Lilly killed himself from the guilt. This guilt, is what made Lally realize the insane privilege that the aliens have, it caused his brother's death and now he eants to avenge it.
The body in the bag is Lilly. Lally wants to help Kitami.
My prediction is that the sister and Lally get along (secretly be boyfriend and girlfriend ot something or maybe just genuine friends) only for other aliens to show up and bully Lally for racemixing. Lally is killed either by himself or by the bullys and Lilly is forced by other aliens to crash...
Are we even sure that Lily even had a confession though? He seems genuinely confused when Kitami is freaking out. I think Kitami had a paranoid delusion.