I wanna know if Chao, such as Cream's friend, Cheese, are of any significance to the lore of Chaos the monster in the anime Sonic X, or even the Chaos Emeralds.
Chaos is indeed a mutated Chao. His Perfect Chaos form is the result of absorbing the seven Chaos Emeralds.
A mutated Chao. Possessing high intelligence and abilities that far exceed those of the rest. A gentle personality; once profiting from the power of the seven Chaos Emeralds, which guaranteed clear water around the altar and protected its race from foreign tribes. However, Knuckles' ancestors were a war-like people and slaughtered many of [Chaos'] fellow Chao in order to plunder the Chaos Emeralds, causing the enraged Chaos to go berserk, absorbing the 7 Chaos Emeralds and transforming into Perfect Chaos. The resultant heavy floods destroyed the civilisation.