Hey, I went to Bali last month! Wish I saw this sooner.
My Indonesian wife reports that this song is called "Kecak" dance. It is a dance of the possessed.
https://en.wikipedia.org/wiki/Kecak
Cool, where's your wife from? I only went to Jakarta, Yogyakarta and then all over Bali. Gotta go back a second time, that country is huge.
I don't wanna sound like an ass, but in the music for 97, the kecak chant is only a part of the sound - instruments are not used in kecak, it's only the men chanting.
The instrumental sound comes from the Legong dance:
https://en.wikipedia.org/wiki/Legong
So, SNK took two styles of Balinese music and mashed them together!
Now, onto the stage background itself. I just prt-sc'd some parts while watching a video so sorry for potato quality.
In the middle we can see Legong dancers and the Barong monster (king of the spirits and personification of good;
https://en.wikipedia.org/wiki/Barong_mythology)
And on the left side we can see Gamelan musicians (
https://en.wikipedia.org/wiki/Gamelan)
Let's compare those with some of my own pictures from watching the Legong & Barong dance at Ubud Palace:
Looks like the 97 designers sure did their homework! It makes me wonder if any of them had visited Bali before?
The final question is, where does this stage take place
exactly? I think it's fair to say it's somewhere in Ubud - which is considered the cultural center of Bali. I want to say it's in the Ubud Palace, but considering the famous entrance isn't included in the background, I'll just go with 'somewhere in Ubud' and leave it at that.
edit: On the right side of the screen is the kecak chant, more details here:
http://www.culturaneogeo.com/localizaciones2.htm#indonesia