To beat the Underworld boss just throw your hat at him to make him teleport to the top left platform. Wait on the right platform until he casts the ball up in to the air then throw your hat to make him teleport to the right platform where you're standing. Move out of the way, he'll get hit with the green ball. You win.
I'm reading these comments and it seems most of us agree that bat-gang is a big setback near end-game. My thought is that you could add a respec feature that you pay for using gems that refunds all the stars you've gained from leveling up and resets all your skills back to 1. That way you actually have something to spend all those gems on after you've fully upgraded your launcher and you can take the best skills to help you end-game. Thumbs up if you think the devs should see this.
I'm really amazed to see how much the combat system has improved since the first game. By leaving the skills and interface the same and allowing you to just open your bag during the fight the game has become immensely more similar to WoW. A good thing in my opinion.