It sure felt like it (I'm sure it's graphically inspired to it), and it instantly reminded me of Eden's garden, but considering its role in the game as Skull Kid's personal refuge, I'd risk and say it's the representation of his childhood and memories. He grew up in the woods, after all, in a previously peaceful environment, but he was left alone. The Majora's Mask allowed him to reverse his microcosm and macrocosm: he let out all the hatred he had to keep in during his life, and thus finding peace inside of him. However, he still couldn't get rid of his loneliness, and that's where he ended up: a peaceful, solitary place.@PenguinManiac excellent post! thats how i felt. I just finished it again a few weeks ago. Do you find that inside the Moon is supposed to be Heaven?
As I have already said, the Moon is really anticlimatic, but it's perfect to make the player symphatise for the Skull Kid.