The novel's description of Moses paints him as a ghostlike man and a hermit. This doesn't necessarily suggest "like a dead man" because being ghostlike is a metaphorical image that is actually a variation on the "pale as a ghost" English idiom. This idiom has the recognized and idiomatically agreed upon meaning of excessively pale and thin, not being robust.
Moses was sent there to live as a solitary hermit because of his erratic behavior, and his son Gerry Nanapush is said to be almost as wild as his father had been (causing his enforced isolation). The significance of the description of Moses as a ghostlike hermit is that his deviance from normal society and normal human deportment is illustrated through this characterization and, in correspondence with him, Lulu is similarly characterized as one who lives outside the bounds of society and accepted human deportment.