It is clay, and when you play the game (i.e. see it in motion) you can clearly make that out. It's stunningly beautiful.
You should get The Swapper in November when it gets a Wii U release (not only for the graphics. The game is amazing).
Just to be clear: I'm not saying the Kirby game looks bad. It looks good, but nowhere near "the most realistic [clay] graphics to have ever hit gaming."