In the blue form you charge up and shoot, when you kill things in this form you collect energy from the dead creatures.
Once you have a charge (white orb forms on chest), you can unleash a deadly scream on all nearby foes by charging an attack in the pink form.
P.S. Spin for a while to change between blue/pink
Correct, you need to kill at least 3 enemies in the Li-Form to activate Naija-Form's devastating scream.
This even works on small fish schools, practically on everything you can kill.
It won't kill greater enemies instantly, though, like the Green Sea Dragon (the big seahorse in The Kelp Forest), except for the barrier-monsters in The Body.