The aliens return to save the rest of the cocoons left on the ocean bed because of an impending earthquake, bringing the old folks with the them.
At the end of the original Cocoon, the space aliens took the cute old folks away to a life of health and harmony in the stars and left behind the rest of their sleeping comrades to vegetate on the ocean bed. With an equal disregard for logic, they return to Earth is this sequel to pick up those cocoons because of an impending earthquake. They also bring the old-timers back, for unspecified reasons that presumably have something to do with the need to keep the plot going.
Actually Cocoon: The Return has more than enough plot to keep it on the move, what with Wilford Brimley trying to help his grandson overcome his misfit inadequacy on the baseball diamond, depressed widower Jack Gilford being forced into candlelit dinners with the available and aerobic Elaine Stritch, Don Ameche and Gwen Verdon discovering they're about to be parents and boatman Steve Guttenburg having alien style sex with the very wooden Tahnee Wlech in a restaurant.
What the film doesn't have is any central thread worth following, so it seems like the pilot for the first ever soap opera to crossbreed The Golden Girls and Close Encounters of The Third Kind.
The first film had its moment of charm, and the cast were good enough to overcome the downright stupidity of the storyline, but this is simply a dreary bore that takes advantage of a terrific cast by moving them about on the screen without giving them anything to do. One long yawn.