So I have this idea for a story arc for my campaign but first some context. 

We have a temporary fifth player joining in and I want to make a special 3 part mini arc and the character the player is making is a hunter who tracks down rare and exotic monsters to cook. Basically like from the anime Toriko (look it up for context)

So the plan is the party and this new player go on a mission together to help a town being attacked by a strange 'bird monster' and other creatures stealing live stock (some villagers have been slain trying to stop the theft and monster) 

Long story short the party will be lead to a cave/dungeon were a group of Kobolds and some Lizard folk are worshiping a Quetzalcoatl thinking it's a dragon (Kobolds) or a higher being of nature (lizardfolk) 

Would this make sense in a story sense?

It's my own homebrew world but I wanted other opinions

Kobold NPCs have the standard INT of 8 (-1) and WIS of 7 (-2).

Lizardfolk NPCs have the standard INT of 7 (-2).

Seems plausible. Zealots being zealots will believe what they want to believe. It doesn't need to make sense to sensible people.

That sounds like a great idea. May I suggest for you to watch a video on Youtube from MrRhexx? He did an excellent video on "What they don't tell you about Kobolds."

That video has some great points not mentioned in the 5E books about how Kobolds work as a race. It spans 1E-5E and expands with several available supplements.  It will also give you some flavor ideas for the kinds of loot that would be found or traded by a group you just described. It will also explain more about their motivations and why their entire way of thinking is completely alien to humans. 

Even though the stat block says otherwise, kobolds are actually pretty smart and they're really good at building traps in the lore. The kobold inventor is a much more accurate stat block, but you run kobolds however you feel!

How about this:

A tribe of Lizardfolk found a large egg whilst out hunting near the edges of their swamp, where the egg came from and how it got there they could not fathom but, believing it to be an unhatched Dragon, they took it to the local tribe of Kobolds whose witchdoctor performed a few magics and loudly proclaimed it was indeed an unborn Dragon and both tribes would unite as one to protect it until it hatched and then go on to serve and worship it. Many moons passed until the day the egg hatched and the "Dragon" emerged, one truly blessed by Tiamat for not only did it have scales but it had feathered wings that showed every colour of Tiamat's glory.

The Dragon is actually a Coatl, normally a Lawful good entity, but the worship of the Kobolds and Lizardfolk, combined with various rituals performed around its egg have warped its alignment to Lawful Evil.

Quote from KoboldNerd >>

Even though the stat block says otherwise, kobolds are actually pretty smart and they're really good at building traps in the lore. The kobold inventor is a much more accurate stat block, but you run kobolds however you feel!

 Being smart doesn't mean you know everything about every subject.

A person having a PhD in engineering doesn't automatically mean they can tell the difference between a garter snake and a cobra.

I am making a campaign where a large amount of kobolds are trying to stop the extinction of the dinosaurs because they think they are ancient dragons. So, yes, I think this is totally feasible. In fact, in many other books and stories, quetzalcoatl are considered to be dragons. 

Quote from KoboldNerd >>

Even though the stat block says otherwise, kobolds are actually pretty smart and they're really good at building traps in the lore. The kobold inventor is a much more accurate stat block, but you run kobolds however you feel!

What comes to my mind with this is a single Kobold trying to tell the rest what's obvious to that Kobold Inventor, but no one else sees that.

Cue Animaniacs' Chicken Boo: One person in each episode sees a giant chicken, and everyone else see a Human man. That one person is often picked on until the giant chicken is revealed. Then, they all chase away the chicken.

That one person in the OP scenario is the Kobold Inventor with the superiour Kobold stat block. The rest have the average stat blocks.

Quote from The_Summoning_Dark >>

I am making a campaign where a large amount of kobolds are trying to stop the extinction of the dinosaurs because they think they are ancient dragons. So, yes, I think this is totally feasible. In fact, in many other books and stories, quetzalcoatl are considered to be dragons. 

Quote from 6thLyranGuard >>

Quote from KoboldNerd >>

Even though the stat block says otherwise, kobolds are actually pretty smart and they're really good at building traps in the lore. The kobold inventor is a much more accurate stat block, but you run kobolds however you feel!

 Being smart doesn't mean you know everything about every subject.

A person having a PhD in engineering doesn't automatically mean they can tell the difference between a garter snake and a cobra.

 Oh, sorry!