It is a filter that limits the vision of the player. I think it was meant to add tension but in the end it just looks ugly. I have no idea if there is a way to remove it. I like the game a lot BUT it would have looked/played much better with out that ugly grainy filter hounding on the visuals.
Nintendo isn't the Apple of gaming, Apple is. Nintendo is the Studio Ghibli of gaming. They create imaginative worlds anyone can get lost in no matter the age.