I always viewed the Lavos shell as a type of living space-ship, but also as a structure which magnified the time abilities of the Lavos Core. You'll notice that when you fight the Lavos core, you see the "blue distortion" background similar to the times when you fight the shell. So I always assumed it served a dual purpose - or even three purposes - as a spaceship, as a magnifying device for Lavos' power over time, and as a shield of sorts to protect Lavos from atmospheric re-entry and impacting the planet.
And then there is the fourth potential purpose of protecting the Lavos Core from annoying time travelling kids that wanna kick his ass.
If all planets have "Entity" existences within them, then I imagine pretty much any planet that Lavos impacts with intelligent life on it would eventually lead to some drama just like Chrono Trigger.
...and speaking of organic spaceships, has anyone here seen the sci-fi show
Farscape that used to be on TV awhile back? That show was weird as hell, but I loved it so much.