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After releasing the Queen CloudRunner for second time, she asked Fox McCloud to help her gather them because they got scared and they ran away and hid all around the CloudRunner Fortress. To reunite them, Fox had to use the CloudRunner Flute to make them fly back to the Queen CloudRunner, or else they would be scared away from the Fortress.
Once they were all gathered, they helped the Queen pressing some lever swiches, which opened the door to the general's hiding place in the Fortress Treasure Rooms.
After receiving the CloudRunner Flute, and the second SpellStone Fox can use the Flute to get a Bafomdad from one of the Queen CloudRunner's kids in ThornTail Hollow.
Krystal meets a caged CloudRunner baby on the deck of General Scales'sSharpClaw Galleon at the start of the game. It may be that this was one of the Queen CloudRunner's children, captured for an act of ransom to its mother, as Scales was next seen in CloudRunner Fortress.