The universe of Dragonstar holds many planets with many sapient species. Earth and the Solar System are somewhat unique in being the home of a single sapient species (sort of). Most planets that are home to sapient species are inhabited by multiple peoples, though one will often dominate the planet and between one to four other planets in the star system. Elf Space, for example, is home to three planets that are dominated by several elf sub species, as well as relatively small populations of dwarves and goblinoids.
Earth has had true interplanetary travel capability for less than a century, and insterstellar capability for even less time. The Dragon Empire conquered Earth roughly 40 years ago, and waited to give Earth interstellar travel and spread word of its new conquest, for about five years to ensure that its rule would be only modestly contested. In the last 35 years, there has been very limited diaspora to Earth by other species.
PCs, however, are exceptional by definition, so the fact that there may only be a handful of, say, Rakshasa shouldn't necessarily mean that they are off limits to players.
Kobolds were the first extraterrestrial species Humans made contact with. They are minor siblings of true dragons, and so afforded a degree of respect in the Dragon Empire,though not much. Much prestige in the Dragon Empire is based on how close one is to true dragon-kind. True dragons of any age are at the top, with greater power equaling greater prestige. Kobolds are near the bottom, roughly on par with sorcerers, though slightly higher, due to their stronger claim to dragon blood. Kobold sorcerers are of course afforded greater respect than kobolds of other classes.
As siblings of dragon kind, kobolds will grow in size as they grow in power. Few kobolds are sufficiently powerful to to grow beyond about four feet, but there are rare kobolds who have become powerful enough to approach some of the weaker wyrms in height.
At 3rd level, or any point thereafter, a kobold may spend 500 xp as part of a ritual requiring reagents worth 500 cr to become Medium size with the Slight Build feature. Kobolds also qualify to take the Large Size and Huge Size feats (usually only available to outsiders and elementals). They must still meet the standard level requirements for these feats. Kobolds can eventually become dragons through the Kobold Ascendant prestige class.
Kobolds use the basic Monster Manual stats. However, those stats are terrible, compared to PHB races. So choose two Pathfinder Kobold Alternate Traits for free (without trade off).