...Is this an attempt to construct a human pyramid version of the kanji character in the background, or what?

Yes. Or what is the correct answer.

It's two kanji in the background, actually. 合体 (gattai)

It does appear to be a combination of wrestling techniques, though, what with Lynette using Muscle Buster on Perrine on top, and Yoshika doing some weird piledriver on Mio.

It's called "Muscle Docking", a combination of Muscle Buster and Muscle Driver. Done in Kinnikuman. King and Marduk also did this in Tekken 5 as Namco's tribute to Kinnikuman (though Marduk only did a regular piledriver, Armor King gains the Muscle Driver in DR).