For anyone who doesn't understand the psychology of this film (SPOILERS)

SPOILERS.

All the people at the motel - john cusack, ray liotta, amanda peet, e.c.t - those characters were not real, they were the different personalities of that fat man, when the fat guy was talking to the parole board or whatever they were, he was killing off each of his personalities in his mind (hence the characters at the motel getting killed off one by one). At the end of the movie the fat guy kills his psychiatrist or whatever he was, then at the VERY END the little boy kills amanda peet's character which means that another one of the fat man's personalities needed to be killed off, and what's left is the little boy which represents the fat guy.

Overall, the fat guy had schizophrenia / multiple personality disorder. And by the end of the movie all of his personalities were killed off, and he no longer had multiple personality disorder, BUT it doesn't mean that he still didn't have homicidal tendencies.

Bottom line the fat man was getting hardcore medical treatment for his multiple personality disorder which forced his personalities to confront each other and the motel scenario with all of those characters getting killed off was his mind's way of getting rid of the disorder.