He runs a small shop in his wagon, selling various trinkets, potions and other bits and bobs. 

He masquerades as a sheep as he wants to be a part of them, but not be discovered to be a wolf, as he fears how they would react. Most of the sheep are aware that he really is a wold, but they play along, perhaps somewhat teasingly. 

All characters should have an Element of Cutesy to them - Look at Animal Crossing Tones (Even though it's gibberish) for Guidance.

All Lines are more of less sounds, akin to How dialogue plays out in The Legend of Zelda, Mario Sunshine etc. So any kind of vocal prompt sounds are welcome! You're pretty much free to Use any one word phrase you want as long as it matches the mood.
Additional "lines" of acknowledging the Player making a response, as well as idle Humming would be fantastic too!