Skull Island is one of at least two Hawaiian islands available for short-term rent somewhere near Wa Ta Lot Ta Hoie. It is right in the shadow of Pink Unicorn Island. Judging from its appearance and name, Skull Island is probably strongly associated with evil. It is much sought after by evil scientists as a remote island hideout, though it can also serve as a prime location for parties. Heinz Doofenshmirtz wanted to use this island as his hideout for his De-Evolution-inator scheme, but it was already booked for Jacob Bernstein's bar mitzvah, so he was forced to settle for Pink Unicorn Island.
Since Heinz was originally planning to use Skull Island as his hideout, it can be assumed that it also has mini-volcanoes that contain the primordial ooze required for the De-Evolution-inator.